Vocab
What is a footing?
The total dollar amounts on the debit and credit sides.
What is the function of an income statement?
It reports the profitability of business operations for a specific period of time.
If you make a withdrawal using the owner's drawing, is it debit or credit?
Debit
What is the function of a statement of owner's equity?
Reports owners equity for a specific period of time.
What is an example of an asset?
Cash, Accounts receivable, Property, Plant, Equipment.
What is a correct entry?
Where you go back and correct a wrong entry.
What is the function of the trial balance?
A trial balance is a list of all accounts showing the title and balance of each account.
Buying equipment with cash will result in cash being debited or credited
Credited
What are the three basic phases of the accounting process?
Input, processing, and output.
What is the Accounting equation?
Assets = Liabilities + Owners Equity
What is a transposition error?
When two digits are reversed (250-520)
What is the left side of the T account called?
The left side is the debit side.
Investing money into the owners equity will result in effecting what side?
The credit side
What is the point of a general journal?
A general journal is a document that records business transactions in sequential order.
This account is an owner’s financial interest into the company
What is owner's equity
What is a slide error?
What is a slide error? - 800 - When a debit or credit amount slides a digit to the left or right. (25.5 - 2.55)
What is the purpose of a chart of accounts?
To know what accounts are being used by the business.
Purchasing a van on account will result in what account being credited?
Account payable
What is the point of a general ledger?
A general ledger is used to record all of a company's transactions
What is an example of a liability?
Accounts payable, Wages payable
What is a contra-asset?
In accounting, a contra asset account is an asset account in which the natural balance of the account will either be a zero or a credit (negative) balance.
What is an asset's depreciable cost?
Is the original cost, less salvage value.
Buying supplies on account will result in what account being debited?
Supplies
What is the function of a balance sheet?
It reports a firm's assets, liabilities, and owners equity on a specific date.
Term used to describe how quickly a company can convert assets into cash
What is liquidity