Topic 2: Accounting for Business Transactions

Question 1

Account

Answer 1

Record within an accounting system in which increases and decreases are entered and stored in a specific asset, liability, equity, revenue, or expense.

Question 2

General Ledger

Answer 2

Record containing all accounts (with amounts) for a business; also called ledger.

Question 3

Ledger

Answer 3

Record containing all accounts (with amounts) for a business; also called general ledger.

Question 4

Source Document

Answer 4

Source of information for accounting entries that can be in either paper or electronic form; also called business papers.

Question 5

Creditor

Answer 5

Individuals or organizations that are entitled to receive payments.

Question 6

Debts

Answer 6

Individuals or organizations that owe money.

Question 7

Chart of Accounts

Answer 7

List of accounts used by a company; includes an identification number for each account.

Question 8

T-Accounts

Answer 8

Tool used to show the effects of transactions and events on individual accounts; shaped in the form of a T.

Question 9

Double Entry Accounting

Answer 9

Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.

Question 10

General Journal

Answer 10

All-purpose journal for recording the debits and credits of transactions and events.

Question 11

Posting Reference (PR) Column

Answer 11

A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.

Question 12

Compound Journal Entry

Answer 12

Journal entry that affects at least three accounts.

Question 13

Trial Balance

Answer 13

List of ledger accounts and their balances (either debit or credit) at a point in time; total debit balances equal total credit balances.