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16 Cards in this Set

  • Front
  • Back
Assets
Economis Resources:
cash and bank accounts
accounts receiveable
inventory
equipment
buildings and land
Liabilities
Debts owed:
banks loans
accounts payable
salaries payable
accrued expenses
Capital
Owners investment in buisness and profits retained in buisness.
Revenue
Money the buisness earns from selling goods and/or services
(COS)
Costs of goods sold to customers
Expenses
Money the buisness has to spend to operate a buisness
Accounts
Used to catergorize and record transactions
Double-entry bookkeeping
Process of recording transactions. Two or more accounts are affected in each transaction with the debit side being equal to the credit side
Debit
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.
Credit
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.
General Journal
Book or original entry.
Transactions are recorded in order of date adn use a column format to record debits and credits.
General Ledger
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.
Posting
Posting is the process of transferring information from a journal to a ledger.
Trial Balance
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.
Gross Margin
Represents the difference between the total sales for the period and the cost that are sold.
Net Income
Is the difference between revenues and expenses when revenues are greater than expenses.