Recording Process
A journal entry that uses three or more accounts
What is a compound entry?
Increase of cash and decrease of accounts payable (debits and credits)
What is debit cash, Credit accounts payable?
Summary device to post transactions with debits on left and credits on the right
What is a T-account?
Revenue minus expenses yields this
What is Net Income or Loss
This means left
What is a Debit?
Transferring information from a journal entry to a ledger account
What is posting?
A company performs services on account for $100 (debits and credits)
What is Debit accounts receivable $100, Credit revenue $100?
A list of all of a company's accounts with their account numbers
What is the Chart of Accounts?
Order of financial statement completion
The normal balance of Assets and Expenses
What is Debit?
Entering a transaction in a journal
What is Journalizing?
A company receives $100 that they are owed from a customer that was already performed
What is Debit cash, Credit accounts receivable?
record holding all of the accounts of a business, the changes in those accounts, and their balances
What is the ledger?
What is Statement of Owner's Equity
When you make an entry on the right side of an account
What is crediting?
The series of accounting activities included in recording financial information for a fiscal period
What is the accounting cycle?
A company purchases a new delivery truck and pays $5,000 cash and finances the remaining $25,000
What is Debit equipment $30,000, Credit notes payable $25,000, and Credit cash $5,000
Where transactions are recorded in chronological order
What is the journal?
Statement that shows net income
What is income statement?
Normal balance for Liabilities, Owner's Equity, and Revenue
What is credit?
Documents that identify and describe transactions
What are source documents?
A company purchases $5,000 of supplies on account for use in the future but they use $500 of supplies right away
What is Debit supplies $4,500, Debit expenses $500, and Credit accounts payable $5,000?
list of all ledger accounts with their balances at a point in time.
What is a trial balance?
A financial statement that reports assets, liabilities, and owner's equity at a specific date
What is the balance sheet?
Debits and credits must always be this
What is equal?