Accounting Transactions 1
Paid cash for advertising in a professional journal...DR/CR
DR: Advertising Expense
CR: Cash
Paid cash to establish a petty cash fund...DR/CR
DR: Petty Cash
CR: Cash
A list of accounts used by a business
chart of accounts
A financial statement that reports assets, liabilities, and owner's equity on a specific date
balance sheet
A financial statement showing the revenue and expenses for a fiscal period
income statement
Sold services on account...DR/CR
DR: Accounts Receivable
CR: Sales
Bought supplies on account...Dr/Cr
DR: Supplies
CR: Accounts Payable
Transferring information from a journal entry to a ledger account
posting
An increase in equity resulting from the sale of goods or services
revenue
An accounting device used to analyze transactions
T account
Paid cash on account...DR/CR
DR: Accounts Payable
CR: Cash
Received cash on account...DR/CR
DR: Cash
CR: Accounts Receivable
A person or business to whom a liability is owed
creditor
A proof of the equality of debits and credits in a general ledger
trial balance
Journal entries used to prepare temporary accounts for a new fiscal period
closing entries
Paid cash to owner for personal use...DR/CR
DR: Drawing
CR: Cash
Recorded bank service charge...DR/CR
DR: Miscellaneous Expense
CR: Cash
The cost of goods or services used to operate a business
expense
Reporting income when earned and expenses when incurred
accrual basis of accounting
Accounts used to accumulate information until it is transferred to the owner's capital account
temporary accounts
Paid cash to replenish the petty cash fund for supplies...DR/CR
DR: Supplies
CR: Cash
Received notice from the bank of a dishonored check...DR/CR
DR: Accounts Receivable
CR: Cash
A planned process designed to compile financial data and summarize the results in accounting records and reports
Accounting System
Accounts used to accumulate information from one fiscal period to the next
permanent accounts
Journal entries recorded to update general ledger accounts at the end of a fiscal period
adjusting entries