Accounting Basics
Assets = Liabilities + Equity
What is the Accounting Equation?
These are resources a company owns or controls and are expected to yield future benefits.
What are assets?
A business paper from which information is obtained for a journal entry.
What is a source document?
These identify and describe transactions and events entering the accounting system.
What are source documents?
The normal balance side is Debit for these three categories.
What are Assets, Drawing and Expenses?
A form for recording transactions in chronological order.
What is a Journal?
These are the concepts and rules Financial Accounting is governed by.
What are Generally Accepted Accounting Principles or GAAP.
These are the owner's claim on assets.
What is equity?
A form describing the goods or services sold, the quantity, the price, and the terms of sale.
What is an Invoice?
This is a record of increases and decreases in specific asset, liability, equity, revenue or expense.
What is an account?
The normal balance side for these three categories is Credit.
What are Liabilities, Capital and Revenues?
A journal entry consists of four parts.
What is date, debit, credit, and source document?
A business form ordering a bank to pay cash from a bank account.
What is a Check?
This occurs when revenue exceeds expenses.
What is net income?
This source document is produced for the total sales of the day.
What is a calculator tape?
This is a record of all accounts used by a company.
What is a ledger?
Student use these accounts named after the 20th letter of the alphabet.
What is a T-account?
Determining that the amount of cash agrees with the accounting records.
What is proving cash?
This is recognized when goods or services are provided to customers.
What is revenue? (Revenue recognition principle)
This occurs when expenses exceed revenue.
What is net loss?
There are five of these in the accounting world.
What is check, sales invoice, receipt, memorandum and calculator tape?
This is an asset account form prepayments of future expenses. An example would be rent or insurance.
What are prepaid accounts?
When journalizing (posting) a transaction this entry is always first.
What is a debit?
Errors are corrected in a way that does not cause doubts about what the correct information is.
What is draw a neat line through the incorrect item?
The recording of debit and credit parts of a transaction.
What is double-entry accounting?
These are creditors claims on assets.
What are liabilities?
A form on which a brief message is written to describe a transaction.
What is a memorandum?
This is a liability that is settled in the future when a company delivers its products or services.
What is unearned revenue?
A business form giving written acknowledgement for cash received.
What is a receipt?
The five step followed in ruling a journal page.
What is rule a single line across all amount columns, write the date on the next line in the date column, Carried forward and check mark, write column total below single line, and rule double lines?