Definitions
What is a fiscal period?
When a business buys a computer with cash, its cash ______, but its computer equipment ________
What decreases and increases?
These are the 2 ways the fundamental accounting equation is stated.
What are 1) Assets-Liabilities=Owner's Equity and 2) Assets=Owner's Equity+Liabilities?
On a chart of accounts, asset accounts start with a 1. What are the numbers for the other terms?
Liabilities 2; Owner's Equity 3; Revenue 4; Expenses 5.
The company buys computers and desk chairs using a combination of credit and cash. What accounts are affected?
Cash, Equipment, and accounts payable.
What is a trial balance?
A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.
Income earned from the sale of goods or services is called?
What is revenue?
What's the difference between a debit and credit?
Debit increases the value of a company, credit decreases the value of the company.
What kind of account is "Cash in Bank"?
Asset.
A company pays off money on Accounts Payable - Devon's Paper. What accounts are affected?
Cash and Accounts Payable - Devon's Paper.
What is a balance sheet?
What is Asset, Liability, Owners Capital?
What is permanent accounts?
An asset account is increased on the "______" side.
Debit.
What kind of account is "Accounts Payable - Best Buy"?
Liabilities.
The owner donates a chair to the company. What two accounts are affected?
Owner's Equity and Equipment.
What is an income statement?
The income statement shows a company's expense, income, gains, and losses.
Property or items of value owned by a business?
What is assets?
A debit is decreased on the the "______" side.
Debit
What does "Classifying" a transaction mean?
Deciding which accounts are affected.
If we debit supplies for $250 because we bought them, what other account is affected?
Cash.
What is a net loss?
A net loss is when total expenses (including taxes, fees, interest, and depreciation) exceed the income or revenue produced for a given period of time.
This is what you use when you are buying something and are not using your debit card.
What is a check?
On a T-Account, what is on the top, left, and right?
Top: Account Name; left: Debits; right: Credits.
How many accounts should be on the chart of accounts?
As many as the business needs.
If the owner wants to pull cash out of a business, what two accounts are affected?
Cash and Owner's Equity.