Unit 2 Terms Flashcards
account
a specially ruled page used to record financial changes. There is one account for each different item affecting the financial position.
All of the accounts together form the ledger.
account balance
the value of the account showing the dollar amount and an indication as to whether it is the debit or credit value
accounting entry
all the changes in the accounts caused by one business transaction, expressed in terms of debts and credits.
For each accounting entry, the total of the debit accounts will equal the total of the credit amounts.
credit
to record an amount on the right-hand side of the account
debit
to record an amount on the left-hand side of the account
double-entry system of accounting
the system of accounting in general use in which every transaction is recorded both as a debit in one or more accounts and as a credit as one or more accounts.
total debit entries = total credit entries
in balance
a state of which all the values of all the accounts with debit balances is equal to all the values of all the accounts with credit balances
ledger
a group or file of accounts that can be stored as pages in a book, as cards in a tray, as tape on a reel, or magnetically on a disk
out of balance
a state of which all the values of all the accounts with debit balances is not equal to all the values of all the accounts with credit balances
payment on account
money paid to a creditor to reduce the balance owed to that creditor
pencil footing
tiny pencil figure total used in accounts and journals
pin total
tiny pencil figure total used in accounts and journals
purchase on account
a purchase that is not paid for at the time that it is made, also called a purchase on credit
receipt on account
money received from a debtor in order to reduce the amount owed by that debtor
sale of account
a sale for which no money is received at the time it is made, also known as a sale for credit
