Principles Of Accounting Chapter 2

Front 1

Define balance.

Back 1

the difference in dollars between the total debit footing and the total credit footing of an account. Also called account balance.

Front 2

Define chart of accounts.

Back 2

A scheme that assigns a unique number to each account to facilitate finding the account in the ledger; also, the list of account numbers and titles.

Front 3

Define classification.

Back 3

the process of assigning transactions to the appropriate accounts.

Front 4

Define compound entry.

Back 4

an entry that has more than one debit or credit entry.

Front 5

Define cost.

Back 5

the exchange price associated with a business transaction at the point of recognition.

Front 6

Define cost principle.

Back 6

the practice of recording transactions at cost.

Front 7

Define credit.

Back 7

the right side of an account.

Front 8

Define debit.

Back 8

the left side of an account.

Front 9

What is the double-entry system?

Back 9

the accounting system in which each transaction is recorded with at least one debit and one credit, so that the total dollar amount of debits and the total dollar amount of credits equal each other.

Front 10

Define footings.

Back 10

working totals of columns of numbers. to foot means to total a column of numbers.

Front 11

Define journal.

Back 11

the simplest and most flexible type of journal.

Front 12

What is the general ledger?

Back 12

the book or file that contains all of the company's accounts, arranged in the order of the chart of accounts. also called ledger.

Front 13

Define journal.

Back 13

a chronological record of all transactions; the place where transactions first enter the accounting records. also called book of original entry.

Front 14

What is a journal entry?

Back 14

journal notations that record a single transaction.

Front 15

What is the journal form?

Back 15

a form of journal in which the date, the debit account, and the debit amount of a transaction are recorded on one line and the credit account and credit amount on the next line.

Front 16

Define journalizing.

Back 16

the process of recording transactions in a journal.

Front 17

Define ledger account form.

Back 17

the form of account that has four dollar amount columns: one column for debit entries, one column for credit entries, and two columns (debit and credit) for showing the balance of the account.

Front 18

Define normal balance.

Back 18

the usual balance of an account; also the side (debit and credit) that increases the account.

Front 19

Define posting.

Back 19

the process of transferring journal entry information from the journal to the ledger.

Front 20

Define recognition.

Back 20

the determination of when a business transaction should be recorded.

Front 21

Define recognition point.

Back 21

the predetermined time at which a transaction should be recorded; usually, the point at which title passes to the buyer.

Front 22

Define source document.

Back 22

an invoice, check, receipt, or other document that supports a transaction.

Front 23

define T account.

Back 23

the simplest form of an account, used to analyze transactions.

Front 24

Define trial balance.

Back 24

a comparison of the total of debit and credit balances in the accounts to check that they are equal.

Front 25

define valuation.

Back 25

the process of assigning a monetary value to a business transaction.