Chapter 2
An amount recorded on the left side of an account
Debit
Anything of value that is owned
Asset
An additional entry that corrects a journal entry.
Correcting entry
Recording transactions in a journal
Journalizing
A bank account from which payments can be ordered by a depositor
Checking Account
The side of the account that is increased
Normal Balance
The principles of right and wrong that guide an individual in making decisions
Ethics
Writing an account title and number on the heading of an account
Opening an account
Entry
A check which has been paid by the bank
Canceled Check
A list of accounts used by a business
Chart of Accounts
Amounts that are owned to others must be identified and assigned values. It is an
amount owed
Liability
A ledger that contains all accounts needed to prepare a financial statement
General Ledger
A business paper from which information is obtained for a journal entry
Source Document
A check that a bank refuses to pay
Dishonored Check
Amounts to be paid in the future for goods or services already required
Accounts Payable
Financial reports that summarize the financial condition and operations of
a business
Financial Statements
Ledger
A group of accounts.
Determining that the amount of cash agrees with the accounting records
Proving Cash
An amount of cash kept on hand and used for making small payments
Petty Cash
Amounts to be received in the future due to the sale of goods or services
Accounts Receivable
The difference between assets and liabilities
Equity
Transferring information from a journal entry to a ledger account.
Posting
A form on which a brief message is written to describe a transaction
Memo or Memorandum
A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder
Debit Card