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24 Cards in this Set

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  • Back
place or location within an accounting wywtem in which the increases and decreases in a specific asset, liability, or equity are recorded and stored
account balance
the difference between the increases (including the beginning balance) and decreases recorded in an account
accounting cycle
the steps repeated each reporting period for the purpose of preparing financial statements for users
accounts payable
obligations that arise when a promise to pay later is made in connection with purchases of merchandise, supplies, or equipment
accounts receivable
recorded when services are performed for or goods are sold to customers in return for promises to pay in the future; transactions are said to be on credit or on account; increased by services performed or goods sold on credit and decreased by cutomer payments
balance column ledger account
an account with debit and credit columns for recording entries and a thrid column showing the balance of the account after each entry is posted
chart of accounts
a list of all accounts used by a company; includes the identification number assigned to each account
coumpound journal entry
a journal entry that affects at least three accounts
an entry that decreases asset, expense, and owner's withdrawals accounts or increases liability, owner's capital, and revenue accounts; recorded on the right side of a T-account
an entry that increases asset, expense, and owner's withdrawals accounts or decreases liability, owner's capital, and revenue accounts; recorded on the left side of a T-account
double-entry accounting
an accounting system where every transaction affects and is recorded in at least two accounts; the sume of the debits for all entries must equal the sum of the credits for all entries
General Journal
the most flexible type of journal; can be used to record any kind of transaction
Journal/book of original entry
a record where transactions are recorded before they are recorded in accounts; amounts are posted from here to the ledger
recording transactions in a journal
a record containing all accounts used by a business
normal balance
the debit or credit side on which an account increases
note receivable/promissory note
an unconditional written promise to pay a definite sume of money on demand or on a defined future date
transfer journal entry information to ledger accounts
posting reference (PR) column
a column in journals where individual account numbers are entered when entries are posted to the ledger; a column in ledgers where journal page numbers are entered when entries are posted
prepaid expenses
an asset account containing payments made for assets that are not to be used until later
a simple characterization of an account form used as a helpful tool in showing the effects of transactions and events on specific accounts
transposition error
error due to two digits being switched within a number
trial balance
a list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances
unearned revenues
liabilities created when customers pay in advance for products or services; created when cash received before revenues are earned; satisfied by delivering the products or services in the future