Accounting Terms
Transferring information from a journal entry to a ledger account.
What is posting?
Paid cash for insurance.
What is DR Prepaid Insurance CR Cash?
These 3 items are found at the very top of the balance sheet.
What are 1) Name of business, 2) Name of the financial statement and 3) Statement date?
T/F Preparing financials statements at the end of each monthly fiscal period is an application of the accounting concept Going Concern.
What is false.
Assets= Liabilities+Owner's Equity
What is the accounting equation?
A business paper from which information is obtained for a journal entry.
What is a source document?
Recorded rent for the month, $600
What is DR Miscellaneous Expense, CR cash?
The owner's capital account would be numbered beginning with this number.
What is 3?
A net loss is entered in the work sheet in this column of the Balance Sheet.
What is debit?
In addition to an owner, these people also have claims against a company's assets.
Who are creditors?
A proof of the equalities of debits and credits in a general ledger.
What is a trial balance?
Received cash on account, $1,500.
What is DR Cash $1,500, CR Accts. Rec. $1,500
A bank loan would be listed under this category on the balance seet.
What is the liabilities section?
When adjusting for the value of the prepaid insurance coverage used during a fiscal period, debit this account.
What is Insurance Expense?
This represents the usual length of a fiscal period.
What is one year?
An increase in owner's equity resulting from the operation of a business.
What is revenue?
Bought supplies on account, $960.
What is DR Supplies $960, CR Accts.Pay, $960
On the work sheet, the balance of the Service Fees Account is extended to this column on the Income Statement
What is credit?
The account is only used in the closing process and does not have a normal debit or credit balance.
What is Income Summary?
This is the acronym used to create the journal entries in the closing process.
What is REID?
Journal entries used to prepare temporary accounts for a new fiscal period.
What are closing entries?
This would be the closing entry for a company that has experienced a net loss.
What is DR Capital and CR Income Summary?
This is another term used on the balance sheet that refers to Owner's Equity.
What is capital?
This accounting concept states that a expenses must be recognized in the same accounting period in which revenue is earned.
What is the Matching Principle?
Accumulated Depreciation is an example of this type of an account.
What is contra-asset?