Account Classifications
Journaling/T-accounts
Writing a transaction
Vocabulary
Wild Card
100
Accounts are classified into one of 3 categories; what are these categories
Assets, Liabilities, Owner's Equity
100
Bought $400 of insurance with cash.
Prepaid Insurance: $400 debit Cash: $400 credit
100
Cash: $500 credit Rent Expense: $500 debit
Owner paid $500 in rent with cash
100
What is the difference between an asset and a liability?
An asset is something a business OWNS; a liability is something a business OWES
100
What is the accounting equation
assets = liabilities + owner's equity
200
What are 4 accounts that are considered to be "asset" accounts?
Cash, Account Receivable, Prepaid Insurance, Supplies
200
Bought $60 worth of supplies on account from Nicholas Supply Company
Supplies: $60 debit Account Payable - Nicholas Supply Company: $60
200
$20 debit to Cash $20 credit to Account Recievable - Shavontae Morgan
Shavontae Morgan paid $20 she owed to the business
200
What does Owner's Equity mean?
The value of the business the owner owns; The value of all assets a business owns minus the value of the liabilities (debt) a business owes.
200
Journal the following transaction: Owner withdraws $315 from business for personal use.
Owner, drawing: $315 debit Cash: $315 credit
300
Liability accounts increase with a ___________ and decrease with a _____________
credit.......debit
300
Sold Services on account to Darnell Gibson, $150
Account Receivable - Darnell Gibson: $150 debit Sales: $150 credit
300
$580 credit to owner, capital $580 debit to Cash
Owner invested $580 into his/her business
300
a ledger that contains all accounts needed to prepare financial statements is called a _________ __________
general ledger
300
What are the 2 parts of an account number?
general ledger division location within the general ledger division
400
A chart of accounts separates all accounts into 2 main sections. What are they?
Balance Sheet accounts and Income Statement accounts
400
Pay off $40 of what is owed to Nicholas Supply Company
Account Payable: $40 debit Cash: $40 credit
400
$350 debit to Account Payable - Gage Supplies $350 credit to Cash
Paid $350 on account to Gage Supplies
400
A list of accounts used by a business is a ?
chart of accounts
400
All asset accounts have a normal ___________ balance.
debit
500
Why are revenues and expenses both considered to be Owner's Equity accounts even though revenues have a debit balance and expenses have a credit balance?
Increases in both revenues and expenses reflect an increase or decrease in the value of the business (owner's equity)
500
Receives check from Darnell Gibson paying $100 of what he owes
Cash: $100 debit Account Receivable - Darnell Gibson: $100 credit
500
$250 debit to Account Receivable - Shameka's Tutoring Service $250 credit to Sales
Sold $250 on account to Shameka's Tutoring Service
500
A business paper from which information is obtained for a journal entry.
source document
500
Both "Owner, Capital", and "Owner, Drawing" are Owner's Equity accounts. Why does Owner, Capital have a credit balance and Owner, Drawing have a debit balance?
Owner, Capital has a credit balance because it reflects an increase to Owner's Equity. Owner, Drawing has a debit balance because it reflects a decrease to Owner's Equity.
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