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10 Cards in this Set
- Front
- Back
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List the steps of the transaction recording process.
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1. Identify the accounts affected and type (assets, liability or owner's equity)
2. Determine whether each account is increase or decreased. 3. Record the transaction in the journal with an explanation, making a journal entry Ex. Date..Accounts/Explanation...Debit....Credit Apr 1......Supplies...(A+).........500 ...................Cash (A-)........................500 Purchased supplies. |
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What is an account?
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Detailed record of the changes in a particular asset, liability, or owner's equity.
- 3 broad categories: Assets, Liabilities, and Owner's Equity -A specific account is the Cash account under Assets, which records all transactions the affect cash |
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What is the ledger?
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The book holding all accounts.
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What is the journal?
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The chronological record of transactions.
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What is the trial balance?
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A list of all accounts with their balances in this order: assets, liabilities, owner's equity.
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What is the chart of accounts?
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List of all accounts with account numbers (numerical versions of the account names.
Ex. Assets 101 Cash 111 Land The account number for cash is 101 |
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What is the double-entry system of accounting?
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Recording the dual effects of each transaction. Every transaction affects at least two accounts.
Ex. A cash purchase of land increases the asset of land and decrease the asset of cash |
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What is a T-Account?
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A format for an account in the shape of a "T."
The left side is the debit side and the right side is the credit site. Ex. Cash T-Account ..............Cash ----------------------------- 1000.........|.............500 2000 ........| |
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What are the Rules of Debit and Credit in the Accounting Equation?
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DEBITS.........................CREDITS
Assets.............=..Liabilities+Owner's Equity Debit...Credit.........Debit....Credit Incr......Dec............Dec......Incr. Ex. an increase in cash, an asset, is a debit |
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What is posting (copying information) to the ledger?
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After a transaction is made into a journal entry, the data is copied/posted to the ledger.
Ex. Journal Entry: Date..Accounts/Explanation...Debit....Credit Apr 1......Supplies...(A+).........500 ...................Cash (A-)........................500 Purchased supplies. Posting to Ledger: ...........Cash....................Supplies ----------------------...........-------------------- .............|........500........500....| |
