Chapter 1
What is the net worth equation?
Total Assets - Total Liabilities
What is the left side of a T account called?
A form for recording transactions in chronological order is called
What is the number assigned to an account?
The account number
A bank account from which payments can be ordered by a depositor is called
A checking account
What are financial reports that summarize the financial condition and operations of a business?
Which side of the T account increases assets?
Left - Debit
A form describing the goods or services sold, the quantity, the price, and the terms of sale is called
An Invoice
Posting
An endorsement indicating a new owner of a check is called
A special endorsement
What are the principles of right and wrong that guide an individual in making decisions?
What is ethics
Which side of the T account decreases liabilities?
Left - Debit
You paid cash for insurance. What two accounts were affected?
Prepaid Insurance and Cash
Determining that the amount of cash agrees with the balance of the Cash account in the accounting records is called..
proving cash
A report of deposits, withdrawals, and bank balances sent to a depositor by a bank is called a
Bank Statement
What is a business owned by one person?
Proprietorship or sole proprietorship
What is the normal balance of Accounts Receivable?
Debit
DAILY DOUBLE!!! You paid cash on account to East Central for Supplies you bought previously. What is the journal entry?
Debit - Accounts Payable
Credit - Cash
What should be drawn through an incorrect posting?
A line
A check that a bank refuses to pay is called a
What is the accounting equation?
Assets = Liabilities + Owner's Equity
You bought supplies on account from East Central. What two accounts are used in this transaction?
Debit - Supplies
Credit - A/P East Central
You received cash from sales. What account was credited?
Sales
When there is an incorrect journal entry, it should be corrected with an additional journal entry called
A correcting entry
An amount of cash kept on hand and used for making small payments is called