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23 Cards in this Set
- Front
- Back
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Account |
A page specially designed to record the changes in each individual item affecting the financial position |
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Ledger |
A group or file of accounts |
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Debit |
Word associated with the left side of an account |
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Credit |
Word associated with the right side of an account |
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Double-Entry System of Accounting |
Whenever a transaction occurs, changes must be made in the accounts, and all account changes must balance (debit and credit) |
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Pin Totals / Pencil Footings |
Subtotals at the bottom of each account |
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Account Balance |
Gives the dollar value of an account and shows if it's a debit or credit value |
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Exceptional Account Balance |
An opposite balance, when an account that normally has a debit balance ends up with a credit balance, or vice versa
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"On Account" |
Delaying payment |
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Trial Balance |
A listing of the account balances in a ledger |
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In Balance |
If the debit balances are equal to the credit balances |
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Out of Balance |
If the debit and credit balances do not agree |
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Taking Off A Trial Balance |
The entire process of creating a trial balance, usually done at the end of a week or month |
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Income Statement |
A financial statement that summarizes the items of revenue and expense, and shows the net income or net loss of a business for a given fiscal period |
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Revenue |
An increase in equity resulting from the sale of goods or services in the usual course of business |
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The Revenue Recognition Convention (GAAP) |
States that revenue must be recorded in the accounts (recognized) at the time the transaction is completed |
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Expense |
A decrease in equity resulting from the costs of producing the revenue |
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Drawings |
Withdrawals of funds by the owner of a business |
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Capital |
Equity figure at the beginning of the fiscal period, plus any new capital or investments made by the owner |
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Fiscal Period / Accounting Period |
The period of time over which earnings are measured. All fiscal periods for a single business are of the same length |
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The Time Period Concept (GAAP) |
Provides that accounting will take place over time periods known as fiscal periods |
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The Matching Principle (GAAP) |
States that each expense item related to revenue earned must be recorded in the same period as the revenue it helped to earn |
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Chart of Accounts |
A list of the ledger accounts and their numbers arranged in ledger order |
