Chapter 1
Define accounting
The process of planning, recording, analyzing, and interpreting financial information.
Define debit
Define a journal
A form for recording transactions in chronological order
Defina a ledger
A group of accounts
What is a checking account
A bank account from which payments can be ordered by a depositor
Define an accounting system
A planned process designed to compile financial data and summarize the results in accounting records and reports
Define credit
An amount recorded on the right side of an account
Define journalizing
Recording transactions in a journal
Define a general ledger
A ledger that contains all accounts needed to prepare financial statements
What is a deposit slip
A bank form which lists the checks, currency, and coins an account holder is adding to a bank account
Define financial statements
Financial reports that summarize the financial condition and operations of a business
Define a T account
An accounting device used to analyze transactions
Define an entry
Information for each transaction recorded in a journal
What is an account number
The number assigned to an account
What is an endorsement
A signature or stamp on the back of a check transferring ownership
Define liability
An amount owed
Define normal balance
The side of an account that is increased is called the normal balance of the account
Define double-entry accounting
The recording of debit and credit parts of a transaction
Define file maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
What is a blank endorsement
An endorsement consisting only of the endorser's signature
The difference between personal assets and personal liabilities
What is a chart of accounts
A list of accounts used by a business
Define a source document
A business paper from which information is obtained for a journal entry
What is proving cash
Determining that the amount of cash agrees with the accounting records
What is a special endorsement
An endorsement indicating a new owner of a check