Shared Flashcard Set

Details

Accounting: What the Numbers Mean- Chapter 4 Vocabulary
The Bookkeeping Process and Transaction Analysis
21
Accounting
Graduate
01/28/2012

Additional Accounting Flashcards

 


 

Cards

Term
account balance
Definition
The arithmetic sum of the additions and subtractions To an account through a given date.
Term
accrual
Definition
The process of recognizing revenue that has been earned but not collected, or an expense that has been incurred but not paid.
Term
accrued
Definition
Describes revenue that has been earned and a related asset that will be collected, or an expense that has been incurred and a related liability that will be paid.
Term
adjustment
Definition
An entry usually made during the process of “closing the books” that results in more accurate financial statements. Adjustments involve accruals and reclassifications. Adjustments are sometimes made at the end of interim periods, such as month-end or quarter-end, as well.
Term
balance
Definition
Same as account balance.
Term
charge
Definition
In a bookkeeping system, a synonym for debt.
Term
chart of accounts
Definition
An index of the accounts contained in a ledger.
Term
closing the books
Definition
The process of posting transactions, adjustments, and closing entries to the ledger and preparing the financial statements.
Term
credit
Definition
The right side of an account. A decrease in asset and expense accounts; an increase in liability, owners' equity, and revenue accounts.
Term
debit
Definition
The left side of an account. An increase in asset and expense accounts; a decrease in liability, owners' equity, and revenue accounts.
Term
entry
Definition
A journal entry or a posting to an account.
Term
horizontal model
Definition
A representation of the balance sheet and income statement relationship that is useful for understanding the effects of transactions and adjustments on the financial statements. The model is:
Term
journal
Definition
A chronological record of transactions.
Term
journal entry
Definition
A description on a transaction in a format that shows the debit account(s) and amount(s) and credit account(s) and amount(s).
Term
ledger
Definition
A book or file of accounts.
Term
on account
Definition
Used to describe a purchase or sale transaction for which cash will be paid or received at a later date. A "credit" transaction.
Term
post
Definition
The process of recording a transaction in the respective ledger accounts using a journal entry as the source of the information recorded.
Term
source document
Definition
Evidence of a transaction that supports the journal entry recording the transaction.
Term
T-account
Definition
An account format with a debit (left) side and a credit (right) side.
Term
transaction analysis methodolo
Definition
The process of answering five questions to ensure that a transaction is understood: 1. What's going on? 2. What accounts are affected? 3. How are they affected? 4. Does the balance sheet balance? (Do the debits equal the credits?) 5. Does my analysis make sense?
Term
transactions
Definition
Economic interchanges between entities that are accounted for and reflected in financial statements.
Supporting users have an ad free experience!