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20 Cards in this Set
- Front
- Back
Source Documents
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identify and describe transactions and events entering the accounting process.
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account
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is a record of increases and decreases in a specific asset, liability, equity, revenue or expense item.
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general ledger
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(ledger) is a record containing all accounts used by a company.
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asset accounts
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assets are resources owned or controlled by a company and that have expected future benefits.
Cash, note receivable, prepaid accounts, supplies, equipment, buildings, land |
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liability accounts
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liabilities are claims by creditors on asset.
accounts payable, notes payable, unearned revenue, accrued liabilities. |
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unearned revenue
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refers to a liabillity that is settled when a company delivers its product or services
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accrued liabilities
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are amount owed that are not yet paid.
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Equity accounts
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the owner's claim on a company's asset.
Investments, revenues, expenses, withdrawals |
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Chart of Accounts
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lis of all ledger accounts and includes an identification number assigned to each account.
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T account
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represents a ledger account and is a tool used to understand the effects of one or more transactions.
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Debit
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Left side DR
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Credit
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right CR
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Double Entry accounting
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at least two accounts are involved
the total amount debited must equal total amount credited. the accounting equation must not be violated. |
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journal
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gives complete records of each transaction in one place.
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journalizing
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process of recording transaction in a journal.
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posting
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process of transferring journal entries to a ledger.
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Concepts to analyzing and recording transactions.
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1. indentify the transaction and any source documents
2. analyze the transaction using the accounting equation 3. record the transaction in journal entry from applying double entry accounting 4. post the entry |
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trial balance
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a list of accounts and their balances at a point in time.
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How to prep a trial balance.
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1. list each account title and its amount (from ledger) in the trial balance. If account has a zero balance, list it with a zero in its normal balance column (or omit entirely)
2. compute the total of debit balances and the total of credit balances. 3. verify total debit balances equal total credit balances. |
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Debt ratio
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= total liabilities/total assets
way to assess risk associated with a company's use of liabilities |