chpt 4
normal balance
the normal balance of an account is the same side used to increase the account.
t account
a tool used by accountants to analyze business transactions
capital
the _____ account shows the amount of the owner's investment, or equity in a business
temporal accounts
used to record information for only one accounting period
accounting cycle
a sequence of business activities completed throughout a fiscal period to keep accounting records in an orderly fashion
credit
the right side of the t account
source document
a business paper that verifies that a transaction actually occurred
expense accounts
used to record the cost and services used by business
withdrawal
an amount of money taken out of the business by the owner
check stub
The Source document for recording a cash payment transaction
debit
the left side of the t account
receipt
the business document prepared when cash is received
permanent acccount
accounts that are used to record information continuously from one accounting period to the next
general journal
an all-purpose journal in which all transactions of a business may be recorded
double entry accounting
the financial recordkeeping system in which each business transaction affects at least 2 accounts
memorandum
a brief message written to describe a transaction that takes place within a business
revenue accounts
records business income only
invoice
is the source document that shows the date of a business transaction the items purchased the quantity of each item and the cost of each item
ledger
accounts are grouped together in this
journalizing
the process of recording business transactions in a journal
revenue recognition
recognizing and recording revenue on the date it is earned even if cash has not been received on that date
a chronological record of business transactions