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23 Cards in this Set
- Front
- Back
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what are source documents?
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they identify and describe transactions and events entering the accounting process. Ex:sales tickets, checks, bank statements
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what is an account?
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a record of increases and decreases of an asset, liability, equity, revenue or expense item
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what is a ledger?
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a record containing all accounts used by a company
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what are prepaid accounts?
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assets that represent prepayments of future expenses. Ex:prepaid insurance, club memberships
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who are creditors?
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individuals and organizations that own the right to receive payments from a company
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what is unearned revenue?
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a liability that is settled in the future when a company delivers its products. Ex:gift certificate sales and season ticket sales
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what are accrued liabilities?
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amounts owed that are not yet paid
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what are the four accounts that impact equity?
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owner's capital, owners withdrawals, revenues and expenses
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what is a ledger?
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the collection of all accounts for an information system
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what is a chart of accounts?
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a list of all accounts a company uses and includes an id number for each account
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what is a t-account?
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represents a ledger account and is used to understand the effects of one or more transactions
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whats the difference between debits and credits in a t-account?
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the left side of the account is called the debit side abbreviated Dr and the right side is called the credit side abbreviated Cr
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what is the account balance?
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the difference between total debits and total credits for an account
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what is double-entry accounting?
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requires that each transaction affect, and be recorded in at least two accounts. The total amount debited must equal the total amount credited for each transaction
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what happens to assets liabilities and equities in double-entry accounting?
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Assets=Liabilities+Equities
Dr inc Dr dec Dr dec Cr dec Cr inc Cr inc |
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what are the four steps of processing transactions?
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(1)analyze transactions and source documents, (2)apply double-entry accounting, (3)record journal entry, (4)post entry to ledger
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what is a journal?
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gives a complete record f each transaction in one place
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what is posting?
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the process of transferring journal entry information to the ledger
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what are the four steps to record entries in a general journal?
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(1)date the transaction entering the year atop the first column and the month and day on the first line of each journal entry, (2)enter titles of accounts debited which is aligned with the left margin of account titles and explanation column (3)repeat step two for credits but indent from the left margin, (4)enter a brief explanation of the transaction on the line below the entry
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what are the four steps to posting journal entries?
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(1)identify the ledger account that is debited,then in the ledger enter the entry date, the journal and page in its PR column, the debit amount and the new balance of the ledger account, (2)enter the ledger account number in the PR column of the journal, steps (3) and (4) repeat the first two steps for credit entries
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what is a trial balance?
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a list of accounts and their balances at a point in time
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what is the accounting, or fiscal year?
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the one year reporting period
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what is a calendar year?
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when the accounting year beings on Jan 1 and ends on Dec 31
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