Unit 2: Chapters 6 & 7

Question 1

accounting cycle

Answer 1

activities performed in an accounting period that help the business keep its records in an orderly fashion

Question 2

source document

Answer 2

a paper prepared as the evidence that a transaction occurred

Question 3

invoice

Answer 3

lists the quantity, description, unit price, and total cost of items sold and shipped to a buyer (source document)

Question 4

receipt

Answer 4

serves as a record of cash received (source document)

Question 5

memorandum (memo)

Answer 5

a brief written message that describes a transaction that takes place within a business (source document)

Question 6

check stub

Answer 6

list the same info that appears on a check and shows the balance in the checking account before and after each check is written (source document)

Question 7

journal

Answer 7

a chronological record of the transactions of a business

Question 8

journalizing

Answer 8

the process of recording business transactions

Question 9

fiscal year

Answer 9

an accounting period of 12 months

Question 10

calendar year

Answer 10

an accounting period that begins on Jan 1. and ends on Dec. 1

Question 11

general journal

Answer 11

an all-purpose journal in which all the transactions of a business may be recorded

Question 12

posting

Answer 12

the process of transferring information from the journal to individual general ledger accounts

Question 13

general ledger

Answer 13

a permanent record organized by account number

Question 14

ledger account form

Answer 14

accounting stationery used to record financial information about specific accounts

Question 15

proving the ledger

Answer 15

adding all debit balances and all credit balances of ledger accounts, then comparing two totals to see whether they are equal

Question 16

trial balance

Answer 16

a list of all the general ledger account names and balances; prepared to prove the ledger

Question 17

transposition error

Answer 17

two digits within an amount are accidentally reversed

Question 18

slide error

Answer 18

decimal point is moved by mistake

Question 19

correcting entry

Answer 19

an entry made to correct an error in a journal entry discovered after posting

Question 20

Setting Up Journal

Answer 20

Debit
Credit
Source document

Question 21

Steps

Answer 21

1. collect & verify source document
   2.analyze each transactions
2. journalize each transaction
   4.post to ledger
   5.trail balance