Accounting 201

Front 1

Account

Back 1

an individual accounting record of increases and decreases in a specific asset or liability, or stockholders equity item.

Front 2

What three parts are apart of an account

Back 2

1.Title

2.A left or debit side

3.A right or credit side

Front 3

T-account

Back 3

Shows the basic account form

Front 4

Debit

Back 4

indicates the left side of an account

Front 5

Credit

Back 5

Indicates the right side of an account

Front 6

why do we use debit and credit?

Back 6

to describe where entries are made in the accounts

Front 7

what represents a receipt of cash in the tabular table?

Back 7

every positive item

Front 8

what represents a payment of cash in the tabular table?

Back 8

every negative amount

Front 9

The equality of debits and credits provides the basis for the ...

Back 9

double entry system

Front 10

Assets normally show debit or credit balances?

Back 10

Debit

Front 11

Liability accounts normally show debit or credit balances?

Back 11

credit

Front 12

Common Stock

Back 12

companies issue common stock in exchange for the owners investments paid in to the corporation.

Front 13

Are Debits or Credits the normal for Common Stock?

Back 13

Credits

Front 14

Retained Earnings

Back 14

is net income that is kept (retained) in the business. It represents the portion of stockholders equity that the company has accumulated through the profitable operation of the business.

Front 15

Are Debits or Credits the normal for Retained Earnings?

Back 15

Credits

Front 16

Dividends

Back 16

is a company's distribution to its stockholders on a pro rata (equal) basis. Dividends reduce the stockholders claims on retained earings

Front 17

What is the most common form of distribution

Back 17

cash dividend

Front 18

Are Debits or Credits the normal for Dividends?

Back 18

Debits

Front 19

`Revenues

Back 19

are a subdivision of stockholders equity that provides information as to why stockholders equity increased.

Front 20

Are Debits or Credits the normal for Revenue?

Back 20

Credits

Front 21

Expenses

Back 21

Expenses decrease stockholders equity.

Front 22

Are Debits or Credits the normal for Expenses?

Back 22

Debits

Front 23

Companies report common stock and retained earnings where?

Back 23

the stockholders equity section of the balance sheet

Front 24

where are dividends reported?

Back 24

retained earnings statement

Front 25

where are revenues and expenses reported?

Back 25

The income statement

Front 26

Companies initially record transactions in ...?

Back 26

chronological order

Front 27

Journal

Back 27

is referred to as the book of original entry. The journal shows the debit and credit effects on specific accounts

Front 28

General Journal

Back 28

Has spaces for dates, account titles and explanations, reference, and two amount columns.

Front 29

What are the three things that the general journal contributes to the recording process?

Back 29

1.It discloses in one place the complete effects of a transaction

2.It provides a chronological record of transactions

3.It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared

Front 30

Journalizing

Back 30

entering transaction data in the journal

Front 31

What three things does a complete journal entry consist of?

Back 31

1.The date of the transaction

2.The accounts and amounts to be debited and credited

3. A brief explanation of the transaction

Front 32

Simple Entry

Back 32

involve only two accounts

Front 33

Compound entry

Back 33

Requires three or more accounts

Front 34

Ledger

Back 34

The ledger provides the balance in each of the accounts as well as keeps track of changes in these balances

Front 35

General Ledger

Back 35

contains all the assets, liability, and stockholders equity accounts.

Front 36

Posting

Back 36

transferring journal entries to the ledger accounts

Front 37

Chart of accounts

Back 37

This chart lists the accounts and the account numbers that identify their location in the ledger

Front 38

What is the purpose of transaction analysis?

Back 38

The purpose is first to identify the type of account involved, and then to determine wether to make a debit or a credit to the account

Front 39

Trial balance

Back 39

is a list of accounts and their balances at a given time.

Front 40

When do companies prepare a trial balance?

Back 40

at the end of the accounting period

Front 41

what are the three steps in preparing a trial balance?

Back 41

1. list the account titles and their balances in the appropriate debit or credit column

2.total the debit and credit columns

3.prove the equality of the two columns

Front 42

What does not appear in journals or ledgers?

Back 42

dollar signs