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25 Cards in this Set
- Front
- Back
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What basic accounting device is used to analyze transactions?
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T-Account
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What determines which side of a T-Account will be the normal balance side
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The location of the account in the accounting equation.The normal balance is the same side of the equation that the account appears on.
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What are the 2 basic rules that determine increases and decreases in accounts
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1. Accounts increase on the normal balance side
2. Accounts decrease on the side opposite the normal balance side |
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Assets increase on what side?
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Debit side
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Liabilities increase on what side?
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Credit side
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Owner's Equity increases on what side?
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Credit side
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Revenue or sales increase on what side?
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Credit side
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Expenses increase on what side?
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Debit side
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Withdrawals increase on what side?
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Debit side
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How do we define debit?
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An amount recorded on the left side of the T-Account
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How do we define Credit?
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An amount recorded on the right side of a T-Account
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What is a "Chart of Accounts"?
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A list of accounts used by a business
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What is a Contra-Account?
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An account that reduces a related account on a financial statement
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What is a journal?
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A form for recording transactions in chronilogical order.
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What is a "Special Amount Column"?
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A journal amount column headed with an account title
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What is a "General Amount Column"?
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A journal amount column that is not headed with an account title
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What do we mean by "Double-Entry" accounting?
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The recording of both the debit and credit parts of a transaction.
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What is a source document?
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A business paper from which information is obtained for a journal entry
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What are the 4 types of source documents?
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Check, Calculator Tape, Receipt, Memorandum
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What is "Proving Cash"?
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Making sure that the amount of cash agrees with the accounting records
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What is the source document for a cash payment?
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A check
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What is the source document for cash received from transactions other than sales
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Receipt
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What is the procedure for "proving a journal page"?
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1. Add each of the amount columns
2. Add the debit column totals and then the credit column totals 3. Verify that total debits equal total credits |
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Define "Check"
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A business form ordering a bank to pay cash from a bank account.
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What is a memorandum?
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A form on which a brief message is written describing a transaction
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