Unit 6,7,8 Terms
This statement keeps a long list of transactions in order of date
Journal / General Journal
What do you call the steps completed during an accounting period?
The Accounting Cycle
What is the first step when recording a transaction?
Writing the date
Where do you indicate the account number?
Top right of the ledger
Shows revenues and expenses to determine profit or loss
Income Statement
What do you call a group of accounts that shows the effect of each transaction on a specific account
General Ledger / Ledgers
Which principle states that the debit side must euqal the credit side?
Double Entry Accounting
Which order do you journalize the transactions?
(Debit / Credit)
Debit then Credit
What is the process of moving to a new ledger called?
Forwarding
A set of accounts used to record transactions resembling a letter in the alphabet
T - Accounts :)
What do you call the process of transferring a transaction from the General Journal to the Ledger?
The process is called "Posting"
What do you call the starting balances of a business on both the General Journal and the Ledger?
Opening Entry
Where do explanation go in the journal?
The line after the credit entry
What section of the ledger indicates if an account has a debit or credit balance?
Dr / Cr section and/or the totals section of the ledger
This statement is used to check that the total debits equal total credits.
(Mathematically accurate)
Trial Balance
What's the name of the table that only contains Account names and number?
The Chart of Accounts
What do you call a transaction where you record more than two debit or credit?
Compound Entry
What is the purpose of journalizing?
It's to record all transactions chronologically
What is the purpose of posting in the ledger?
To organize accounts and update balances
A formal statement indicating financial standing at a specific point in time
Balance Sheet
What do you call the original document proving a transaction?
Source Document
Which accounting principle requires every transaction to be backed by proof?
The principle of objectivity
What is the 4-step process of Journalizing a transaction?
1. Date
2. Debit Entry
3. Credit Entry
4. Explanation
What are the 5 steps in posting an opening balance to a ledger? (The account name and Number are already included
1. Date transaction
2. Write "Opening Entry" in Particulars
3. Write Journal Page number in PR
4. Cr/Dr accounting to account balance
5. Write out Opening Balance in the "Balance" Section
Ensures the accounting equation stays balanced when analyzing EVERY SINGLE TRANSACTION
The Transaction Analysis Sheet