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10 Cards in this Set

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  • Back
Describe the practicallity of accounts?
Whenever a transaction occurs, the accountants record it and organize the elements of the transaction into accounts that group similar items together.
For example the cash accounts collects all elements that collect affect cash.
Define Ledger?
A ledger contains the records for a group of related accounts. A ledger may be in the form of a bound record book, a loose leaf set of page, or some kind of electronic storage element.
The book refers to the ledger.
Why the T-Accounts are called T-Accounts?
Because they take the form of a capital letter T.
Describe the implications of T-Accounts on Assets?
The left side of T-Accounts icreases the assets
The right side of T-Accounts decreases the assets.
Describe the implications of T-Accounts on Liabilities and equity Accounts?
The left side of T-Accounts decreases the liability and equity.
The left side of T-Accounts icreases the liability and equity
Describe a balance of a T-Account?
The difference between total left side and right side of the t-account is called a balance.
What is the other term of the left side of T-Account?
It does not mean decrease.
Some accountants also use charge instead of debit.
What is the other term of the right side of T-Account?
It does not mean increase
What are the steps of recording process?
1-Transaction Documentation(like sales reciept)
2-Journal (place the analysis based on the original entry in the journal)
3-Ledger (the process of placing leftside and right side entries into specific accounts)
4-Trial Balance (simple listing of the accounts with their balances)
5-Financial Statements (every month or quarter management prepares the financial statements to analyze the financial impacts).
Define Chart of Accounts.
To define a consistency in recording transactions, organizations specify a chart of accounts which is a numbered or coded list of all account titles.