Financial Accounting Chapter 2-A

Front 1

account

Back 1

device used to list information about anything we want to keep track of

Front 2

device used to list information about anything we want to keep track of

Back 2

account

Front 3

ledger

Back 3

when all pages or accounts are combined into a book

Front 4

when all pages or accounts are combined into a book

Back 4

ledger

Front 5

chart of accounts

Back 5

list of accounts used by the company

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list of accounts used by the company

Back 6

chart of accounts

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cash

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(asset) any money or other items that the bank will accept at face value

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(asset) any money or other items that the bank will accept at face value

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cash

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accounts receivable

Back 9

amounts owed to you as a result of you providing goods and services on account. No signed note

Front 10

amounts owed to you as a result of you providing goods and services on account. No signed note

Back 10

accounts receivable

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notes receivable

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amounts owed to you that are evidenced by a promissory note

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amounts owed to you that are evidenced by a promissory note

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notes receivable

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merchandise inventory

Back 13

the goods on hand that a business is selling as a part of its regular operations

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the goods on hand that a business is selling as a part of its regular operations

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merchandise inventory

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office supplies

Back 15

account representing things like paper, pencils, and paper clips

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account representing things like paper, pencils, and paper clips

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office supplies

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prepaid expenses

Back 17

(asset) when a company pays for something in advance. considered an asset because the company expects to get some benefit from it in the future.

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(asset) when a company pays for something in advance. considered an asset because the company expects to get some benefit from it in the future.

Back 18

prepaid expenses

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Building

Back 19

account consists of buildings used by the business

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account consists of buildings used by the business

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building

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land

Back 21

account that keeps track of land that is owned and used by the business

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account that keeps track of land that is owned and used by the business

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land

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accounts payable

Back 23

an oral or implied promise to pay in the future for a good or service which has already been received

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an oral or implied promise to pay in the future for a good or service which has already been received

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accounts payable

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notes payable

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written agreement to pay in the future for a good or service

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written agreement to pay in the future for a good or service

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notes payable

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other payables

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liabilities based on implied promises to pay other than accounts or notes payable. includes taxes payable, wages payable, salaries payable.

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common stock

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represents the investment in a company by the owners as evidenced by the owners' stock certificates

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represents the investment in a company by the owners as evidenced by the owners' stock certificates

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common stock

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retained earnings

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the accumulation of earnings, less dividends, over the life of the business

Front 31

capital

Back 31

account used in proprietorship or partnership instead of retained earnings and common stock

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account used in proprietorship or partnership instead of retained earnings and common stock

Back 32

capital

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dividends

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when the board of directors declares a return to the owners

Front 34

when the board of directors declares a return to the owners

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dividends

Front 35

what two accounts are associated with the income statement?

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revenues and expenses

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revenues

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increases in owners equity created by providing the business' goods and services to customers in return for present or future economic benefits

Front 37

increases in owners equity created by providing the business' goods and services to customers in return for present or future economic benefits

Back 37

revenues

Front 38

expenses

Back 38

decreases in owners' equity which occur as a result of receiving goods or services from another entity during the operation of business

Front 39

decreases in owners' equity which occur as a result of receiving goods or services from another entity during the operation of business

Back 39

expenses

Front 40

which side increases the amount of an asset?

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debit

Front 41

which side decreases the amount of an asset?

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credit

Front 42

double entry accounting

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the type of accounting where for every transaction at least two accounts are affected in order to keep the equation balanced

Front 43

the type of accounting where for every transaction at least two accounts are affected in order to keep the equation balanced

Back 43

double entry accounting

Front 44

which side increases the amount of a liability?

Back 44

credit

Front 45

which side increases the amount of owners' equity?

Back 45

credit

Front 46

which side decreases the amount of a liability?

Back 46

debit

Front 47

which side decreases the amount of owners' equity?

Back 47

debit

Front 48

which side increases the amount of dividends?

Back 48

debit

Front 49

which side increases the amount of expenses?

Back 49

debit

Front 50

which side decreases the amount of expenses?

Back 50

credit

Front 51

which side decreases the amount of dividends?

Back 51

credit

Front 52

normal balance

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refers to the side, either debit or credit, where an increases in the account are generally found

Front 53

refers to the side, either debit or credit, where an increases in the account are generally found

Back 53

normal balance

Front 54

trial balance

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a listing of the ending debit and credit balances for all the company's accounts

Front 55

a listing of the ending debit and credit balances for all the company's accounts

Back 55

trial balance

Front 56

what is the order of accounts on a trial balance?

Back 56

assets, liabilities, owners' equity, revenues, expenses