Accounting 1 Chapter 2 Vocab

Front 1

Account

Back 1

An accounting form that is used to record the increases and decreases in each financial statement item.

Front 2

Assets

Back 2

The resources owned by a business.

Front 3

Balance of the Account

Back 3

The amount of the difference between the debits and the credits that have been entered.

Front 4

Chart of Accounts

Back 4

A list of the accounts in the ledger.

Front 5

Credits

Back 5

Amounts entered on the right side of an account.

Front 6

Debits

Back 6

Amounts entered on the left side of an account.

Front 7

Double-Entry Accounting

Back 7

A system of accounting for recording transactions, based on recording increases and decreases in accounts so that debits equal credits.

Front 8

Drawing

Back 8

The account used to record amounts withdrawn by an owner of proprietorship.

Front 9

Expenses

Back 9

Assets used up or services consumed in the process of generating revenues.

Front 10

Horizontal Analysis

Back 10

Financial analysis that compares an item in a current statement with the same item in prior statements.

Front 11

Journal

Back 11

The initial record in which the effects of a transaction are recorded.

Front 12

Journal Entry

Back 12

The form of recording a transaction in a journal.

Front 13

Journalizing

Back 13

The process of recording a transaction in the journal.

Front 14

Ledger

Back 14

A group of accounts for a business.

Front 15

Liabilities

Back 15

The rights of creditors that represent debts of the business.

Front 16

Materiality Concept

Back 16

A concept of accounting that implies that an error may be treated in the easiest possible way.

Front 17

Owner's Equity

Back 17

The owner's right to the assets of the business.

Front 18

Posting

Back 18

The process of transferring the debits and credits from the journal entries to the accounts.

Front 19

Revenues

Back 19

Increases in owner's equity as a result of selling services or products to customers.

Front 20

Slide

Back 20

An error in which the entire number is moved one or more spaces to the right or left, such as writing $542.00 as $54.20 or $5,420.00.

Front 21

T Account

Back 21

The simplest form of an account.

Front 22

Transposition

Back 22

An error in which the order of the digits is changed, such as writing $542 as $452 or $524.

Front 23

Trial Balance

Back 23

A summary listing of the titles and balances of accounts in the ledger.

Front 24

Two-Column Journal

Back 24

An all-purpose journal.

Front 25

Unearned Revenue

Back 25

Items that have been initially recorded as liabilities but are expected to become revenues over time or through the normal operations of the business.