Accounting 101
In double-entry accounting, one is on the left and one is on the right of a T-account.
What is a debit and credit?
The number of steps in the accounting cycle studied in Accounting I.
What is eight?
Asset, Liability, and Owners Capital account are all examples.
What is permanent accounts?
The two accounts affected when a business buys paper and pens with cash.
What is Cash and Supplies?
For assets, this happens on the debit side of the account.
What is the normal balance or increase side?
The fundamental accounting equation.
What is Assets = Liabilities + Owners Equity?
The step where we transfer information from the journal to the ledger.
What is posting to the ledger?
The difference between revenue and expenses when revenue is greater.
What is Net Income?
The two accounts affected when a business sells services on account.
What is accounts receivable and sales?
Money a company spends in order to generate revenue.
What is an expense?
The purpose is to prove debits = credits prior to making adjusting entries.
What is trial balance?
To pay on account would result in a debit to ________ and credit to ________.
What is accounts payable and cash?
Refers to a common set of accounting principles, standards, and procedures required to be used by publicly traded companies.
What is GAAP?
The financial statement which proves the accounting equation.
What is the balance sheet?
The two financial statements created in step 6 of the accounting cycle.
What is an income statement and balance sheet?
Used to prove a transaction actually took place and recorded in the Doc No column of the journal.
What is a source document?
This system is used to analyze and record a transaction where debits = credits.
What is double-entry accounting?
The purpose of this step is to bring the balance of all temporary accounts to zero to prepare them for the next period.
What is journalize and post closing entries?
Updates performed at the end of an accounting period after a trial balance is prepared to update the revenues and expenses for the period in which they occurred.
What are adjustments?