Term
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Definition
| an individual accounting record of increases and decreases in specific assets, liability, stockholders' equity, revenue or expense items |
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Term
| accounting information systems |
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Definition
| the system of collecting and processing transaction data and communicating financial information to interested parties |
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Term
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Definition
| events that require recording in the financial statements because they affect assets, liabilities, or stockholders' equity. |
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Term
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Definition
| a list of a company's accounts |
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Term
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Definition
| the right side of an account |
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Term
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Definition
| the left side of an account |
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Term
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Definition
| a system that records the dual effect of each transaction in appropriate accounts |
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Term
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Definition
| the most basic form of journal |
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Term
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Definition
| a ledger that contains all asset, liability stockholders' equity, revenue, and expense accounts |
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Term
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Definition
| an accounting record in which transactions are initially recorded in chronological order |
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Term
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Definition
| the procedure of entering transaction data in the journal. |
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Term
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Definition
| the group of accounts maintained by a company |
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Term
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Definition
| the procedure of transferring journalentry amounts to the ledger accounts |
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Term
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Definition
| the basic form of an account |
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Term
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Definition
| a list of accounts and their balances |
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Term
| analyze the effect of business transactions the basic accounting equation |
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Definition
| Each business transaction must have a dual effect on the accounting equation. For example, if an individual asset is increased, there mus be a corresponding (a) decrease in another asset, or (b) increase in a specific liability, or (c) increase in stockholders' equity. |
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Term
| explain what an account is and how it helps in the recording process |
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Definition
| an account is an individual accounting record of increases and decreases in specific asset, liability, and stockholders' equity items. |
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Term
| define debits and credits and explain how they are used to record business transactions. |
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Definition
| the terms debit and credit are synonyms with left and right. Assets, dividends, and expenses are increased by debits and decreased by credits. Liabilities, common stock, retained earnings, and revenues are increased by credits and decreased by debits |
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Term
| identify te basic steps in the recording process. |
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Definition
| The basic steps in the recording process are: (a) analyze each transaction in terms of its effect on the accounts, (b) enter the transaction information in a journal, and (c) transfer the journal information to the appropriate accounts in the ledger. |
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Term
| Explain what a journal is and how it helps in the recoring process |
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Definition
| the initial account record of a transaction is entered in a journal before the data are entered in the accounts. A journal (a) discloses in one place the complete effects of a transaction, (b) provides a chronological record of transactions, and (c) prevents or locates errors because the debit and credit amounts for each entry can be readily compared |
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Term
| Explain what a ledger is and how it helps in the recording processs. |
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Definition
| the entire group of accoutns mantained by a company is referred to collectively as a ledger. The ledger keeps in one place all the information about changes in specific account balances |
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Term
| explain what posting is and how it helps in the recording process |
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Definition
| posting is the procedure of transferring journal entries to the ledger accounts. This phase of the recording process accumulates the effects of journalized transactions in the individual accounts |
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Term
| explain the purposes of a rial balance |
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Definition
| a trial balance is a list of accounts and their balances a a given time. The primary purpose of the trial balance is to prove the mathematical equality of debits and credits after posting. A trial balance also uncovers errors in journalizing and posting and is useful in preparing financial statements |
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Term
| classify cash actives as operating, investing, or financing |
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Definition
| operating activities are the types of activities the company uses to generate profits. Investing activities relate to the purchase or sale of long-lived assets used in operating the business, or the purchase or sale of investments securities (stock and bonds of other companies). Financing activities are borrowing money, issuing shares of stock, and paying dividends. |
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Term
| normal balance for assets |
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Definition
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Term
| normal balance for liabilities |
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Definition
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Term
| normal balance for common stock |
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Definition
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Term
| normal balance for retained earnings |
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Definition
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Term
| normal balance of dividends |
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Definition
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Term
| normal balance for revenues |
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Definition
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Term
| normal balance for expenses |
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Definition
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