Chapter 1
Assets = Liabilities + Owner's Equity
What is the Accounting Equation?
An increase in owner's equity resulting from the operation of a business
What is revenue?
An accounting device used to analyze transactions
What is a T-Account?
A form for recording transactions in chronological order
What is a journal?
A group of accounts
What is a ledger?
Anything of Value that is owned
What is an asset?
A sale for which cash will be received at a later date
What is a sale on account?
The side of the account that is increased
What is the normal balance?
Recording transactions in a journal
What is journalizing?
A ledger that contains all accounts needed to prepare financial statements
What is a general ledger?
Financial rights to the assets of a business
What are equities?
A decrease in owners equity resulting from the operation if a business
What is an expense?
The right side of the account
What is the Debit side?
A journal amount column headed with an account title
What is a special amount column?
The number assigned to an account
What is an Account number?
An amount owed by a business
What is a liability?
Assets taken out of a business for the owner's personal use
What is a withdrawal?
The left side of the account?
What is the credit side?
A journal amount column that is not headed with an account title
What is a general amount column
Writing an account title and number on the heading an an account
What is opening an account?
A business owned by one person
What is a Sole Proprietorship?
The name of the account when an owner takes out money for personal use?
What is drawing?
A list of accounts used by a business
What is a chart of accounts?
A business paper from which information is obtained for a journal entry
What is a source document?
Transferring information from a journal entry to a ledger account
What is posting?