History
where was accounting invented
Italy
what is a chart of accounts
a number listing of all the accounts in a companies accounting system
Three word definition for assets
Things you own
Three word definition for liabilities
Things you owe
Short definition for OE
an owner's claim on the assets of a business
When was double entry accounting invented
In the 1400's during the renaissance
What does debit mean
Left
What is A/R
Accounts receivable is an amount you are owed for a product or service that you delivered
What is A/P
accounts payable is an amount you owe for something you have already received
What are the two main elements in owners equity
Contributed Capital and Retained Earnings
Is double entry accounting still in use today
Yes
What does credit mean
Right
What is the normal balance for Asset Accounts
Debit
What is the normal balance for liabilities
Credit
What is the normal balance for Owner's Equity accounts
Credit
For every transaction you have to make two entries
how are accounts ordered WITHIN each of the 5 main groups
descending order from current to non-current
What does normal balance mean
the side of the account it increases on
Give of an example of a liability that also appears on the company's books as an asset
a bank loan
What is the formula for net income
Income = Revenue - Expenses
Who is the father of accounting
Luca Pacioli
What are the five main groups in the CoA in order
assets, liabilities, equity, income, expenses
What is the accounting equation
Assets=Liabilities + Owner's Equity
When are liabilities recorded: A) When incurred B) When paid C) At the end of a fiscal year D) When bank accounts are reconciled
A) When incurred
Why do expenses have a normal debit balance
because they make OE go down