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16 Cards in this Set
- Front
- Back
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Assets
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Economis Resources:
cash and bank accounts accounts receiveable inventory equipment buildings and land |
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Liabilities
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Debts owed:
banks loans accounts payable salaries payable accrued expenses |
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Capital
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Owners investment in buisness and profits retained in buisness.
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Revenue
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Money the buisness earns from selling goods and/or services
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(COS)
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Costs of goods sold to customers
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Expenses
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Money the buisness has to spend to operate a buisness
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Accounts
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Used to catergorize and record transactions
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Double-entry bookkeeping
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Process of recording transactions. Two or more accounts are affected in each transaction with the debit side being equal to the credit side
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Debit
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Refers to the left side of an entry and may be abbreviated as DR
eg. an increase in an asset account or an expense account, and a decrease in a liability or capital account, or revenue account. |
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Credit
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Refers to the right side of an engry and may be abbreviated as CR,
eg. an increase in a liability or capital account, or a revenue account, and a decrease in an asset or expense account. |
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General Journal
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Book or original entry.
Transactions are recorded in order of date adn use a column format to record debits and credits. |
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General Ledger
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Used to record the balance of each account. Each account is assinged a separate page, and the ledger is the collection or all these pages.
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Posting
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Posting is the process of transferring information from a journal to a ledger.
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Trial Balance
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After all journal entries have benn posted to the ledger, a Trial Balance is prepared to confirm that the total debits equal the total creidits in the ledger.
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Gross Margin
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Represents the difference between the total sales for the period and the cost that are sold.
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Net Income
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Is the difference between revenues and expenses when revenues are greater than expenses.
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