General Accounting Questions
The Accounting Equation
What is Assets = Liabilities + Owner's Equity?
The financial statement where you can find the assets, liabilities and owner's equity
What is The Balance Sheet
The type of accounts that need to be closed at the end of the fiscal period
What are Temporary Accounts?
The normal balance of a revenue account
What is a Credit?
A credit is posted to this account when a business receives cash before the revenue is to be recognized
What is Unearned Revenue or Deferred Revenue?
The place where transactions are posted in a debit/credit format
What is the general ledger?
Another name for The Balance Sheet
What is The Statement of Financial Position?
Usually the first step in the closing entries is to close these kinds of accounts
What are Revenue Accounts?
The credit is posted to this account when you purchase something and intend to pay for it later
What is Accounts Payable?
A debit is posted to this account when a business pays for an expense before it is to be recognized
What is a Prepaid Expense?
A list of the organizations' accounts and their account numbers
What is The Chart of Accounts?
The financial statement where you can find revenues, expenses, gains and losses
What is The Income Statement?
All of the closing entries involve an entry to this account (other than closing dividends)
What is Income Summary?
This is a compulsory deduction from a paycheque, along with income tax and employment insurance (EI)
What is CPP?
The credit part of the entry to record depreciation is always to this type of account
What is Accumulated Depreciation?
A list of accounts and their current balances. Total debits must equal total credits
What is The Trial Balance?
The financial statement that shows the sources and uses of cash
What is The Cash Flow Statement?
The account where dividends are closed to
What is Retained Earnings?
The owner's initial investment is recorded as a credit to this account in a sole proprietorship
What is Capital (or Equity)?
This account is used to estimate the uncollectible portion of the accounts receivable
What is Allowance for Doubtful Accounts?
The act of transferring data from the journal to the ledger
What is Posting?
The financial statement that shows the opening equity balance, the ending equity balance and the changes in between
What is The Statement of Changes in Equity?
The document that is prepared after the financial statements have been prepared and closing entries completed
What is the Post-Closing Trial Balance?
Under this type of inventory system, the inventory account balance is updated for each purchase or sale
What is a Perpetual Inventory System?
This basis of accounting is the reason that adjusting entries must be made (opposite of cash basis)
What is Accrual?