Recording Transactions in a General Journal - Ch 6
Collect and verify source documents. Analyze each transaction. Journalize each transaction.
What are the first three steps of the accounting cycle.
This is the process by which random transactions become organized in a manner according to accounts
What is Posting?
After completing the work sheet, you will know the net or net for the accounting period.
What is income and loss?
This reports the net income or net loss for an accounting period.
What is the income statement?
These are steps taken to protect assets and keep reliable records. The bank reconciliation is an example of an important one of these.
What are Internal controls?
Journalizing
What is the process of recording business transactions.
Invoice, Receipt, Memorandum, Check stub
What are Commonly Used Source Documents
A permanent record organized by account number.
What is a General Journal?
What is Who, What, and When?
What are types of financial statements?
Protects cash and provides a record of transactions.
What is a checking account?
This reports the sources and uses of cash during the accounting period.
What is the statement of cash flows?
Accounting period of twelve months.
What is a fiscal year.
A new account is computed each time a transaction is posted to an account.
What is a balance?
Drawing a line; a single rule (line) drawn under a column of figures indicates that the entries above the rule are to be added or subtracted. If an amount is a total and no further processing is needed, a double rule is drawn under it.
What is ruling and totaling?
A report of the net income or net loss for a specific period; sometimes called a profit-and-loss statement or earnings statement.
What is an income statement?
The person or business to whom a check is written or a note is payable.
What is a payee?
The Balance Sheet Summarizes:
What is what a business owns, what a business owes, and what a business is worth?
Two Columns of the General Journal: The column is for recording debits. The column for recording credits
What is left and right.
What do you do to show a zero balance after you post a transaction?
What is draw a line across the center of the column—where the normal balance would appear?
The amount by which total expenses exceed total revenue for the accounting period.
What is a net loss?
The equation for calculating return on sales.
What is dividing net income by sales.
Faulty addition or subtraction, failure to record a deposit or a check, a mistake in copying the balance forward amount to the next check stub
What are common checkbook errors?
The process of evaluating the relationship between various amounts in the financial statements.
What is a ratio analysis?
When writing a check to an accounts payable account, you would record a decrease from this permanent account.
What is cash in bank.
What is General Ledger page #1?
To check the of the net income amount in the Balance Sheet section, subtract the total of the Credit column from the total of the Debit column.
What is accuracy?
A journal entry with two or more debits or two or more credits.
What is a compound entry?
A check returned to the depositor by the bank because the drawer’s checking account does not have sufficient funds to cover the amount; also called dishonored check.
What is an NSF (or Not Sufficient Funds) check
Journal entries made to close, or reduce to zero, the balances in the temporary accounts and to transfer the net income or net loss for the period to the capital account.
What are closing entries?