Term
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Definition
- quick simple tools to see how a small number of transactions and events will impact a company
- debits on the left, credits on the right
- the "balance" is the amount by which debits exceed credits (or vice versa)
- for very transaction debits= credits |
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Term
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Definition
1. assets: debits(+), credits(-)
2. liabilities: debit(-), credit(+)
3. equity: debit(-), credit(+)
*D-E-A-D= Debits increase Expenses, Assets, and Dividends* |
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Term
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Definition
- accounts
- general ledger
- debits and credits
- journals |
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Term
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Definition
- records that are kept for each asset, liability, revenue, expense, and dividend component of an entity
- all accounts comprise a general ledger
- control accounts should be reconciled w/ subsidaries |
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Term
| Analyzing and Recording Process |
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Definition
1. Analyze each transaction and event from source documents
2. record relevant transactions and events in a journal
3. post journal information to ledger accounts
4. prepare and analyze the trial balance |
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Term
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Definition
| - evidence of a transaction or vent: checks, purchase orders, bills from suppliers, bank statements, employee earnings records |
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Term
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Definition
- a chronological listing of transactions and events(documented in debit/credit format)
- aka "book of original entry"
- list debits first(flush left), then credits(indented right)
- compound entry may involve more than two accounts |
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Term
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Definition
| - a record of accounts comprising the financial statements and their balances |
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Term
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Definition
- a listing of the ledger accounts along w/ their respective debit or credit balances
- not a formal financial statement
- self-check to determine that debit equals credit |
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Term
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Definition
| _ Basic Process: transfer amounts from the general ledger to the trial balance, then into the financial statements |
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Term
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Definition
- total liabilities/total assets
- evaluates the level of debt risk
- a higher ratio indicates that there is a greater probability that a company will not be able to pay its bills in the future |
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