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20 Cards in this Set

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Source Documents
identify and describe transactions and events entering the accounting process.
account
is a record of increases and decreases in a specific asset, liability, equity, revenue or expense item.
general ledger
(ledger) is a record containing all accounts used by a company.
asset accounts
assets are resources owned or controlled by a company and that have expected future benefits.

Cash, note receivable, prepaid accounts, supplies, equipment, buildings, land
liability accounts
liabilities are claims by creditors on asset.

accounts payable, notes payable, unearned revenue, accrued liabilities.
unearned revenue
refers to a liabillity that is settled when a company delivers its product or services
accrued liabilities
are amount owed that are not yet paid.
Equity accounts
the owner's claim on a company's asset.

Investments, revenues, expenses, withdrawals
Chart of Accounts
lis of all ledger accounts and includes an identification number assigned to each account.
T account
represents a ledger account and is a tool used to understand the effects of one or more transactions.
Debit
Left side DR
Credit
right CR
Double Entry accounting
at least two accounts are involved

the total amount debited must equal total amount credited.

the accounting equation must not be violated.
journal
gives complete records of each transaction in one place.
journalizing
process of recording transaction in a journal.
posting
process of transferring journal entries to a ledger.
Concepts to analyzing and recording transactions.
1. indentify the transaction and any source documents

2. analyze the transaction using the accounting equation

3. record the transaction in journal entry from applying double entry accounting

4. post the entry
trial balance
a list of accounts and their balances at a point in time.
How to prep a trial balance.
1. list each account title and its amount (from ledger) in the trial balance. If account has a zero balance, list it with a zero in its normal balance column (or omit entirely)

2. compute the total of debit balances and the total of credit balances.

3. verify total debit balances equal total credit balances.
Debt ratio
= total liabilities/total assets

way to assess risk associated with a company's use of liabilities