Accounting Transactions 1
Paid cash for advertising in a professional magazine...DR/CR
DR: Advertising Expense
CR: Cash
Received a sales on account for a service performed by the business.
DR: A/R
CR: Fees Earned
A list of accounts used by a business
chart of accounts
A financial statement that reports assets, liabilities, and owner's equity on a specific date
balance sheet
Recording the cost of the asset, not the market value.
Cost Principle
Sold services on account...DR/CR
DR: Accounts Receivable
CR: Sales
Bought supplies on account...Dr/Cr
DR: Supplies
CR: Accounts Payable
Transferring information from a journal entry to a ledger account
posting
An increase in equity resulting from the sale of goods or services
revenue
Keep personal transactions separate from business
Business Entity
Paid cash on account...DR/CR
DR: Accounts Payable
CR: Cash
Received cash on account...DR/CR
DR: Cash
CR: Accounts Receivable
An accounting device used to analyze transactions
T account
A proof of the equality of debits and credits in a general ledger
trial balance
The business has no intention of closing.
Going Concern Principle
Paid cash to owner for personal use...DR/CR
DR: Drawing
CR: Cash
Recorded bank service charge...DR/CR
DR: Miscellaneous Expense
CR: Cash
The cost of goods or services used to operate a business
expense
A mathematical symbol you will never see on a Financial Statement (like a Balance Sheet).
A negative sign
A business's accounting be recorded on the basis of clear, verifiable evidence - like source documents.
The Objectivity Principle
Received a partial cash refund for the Utility expense that was overpaid...DR/CR
DR: Cash
CR: Utilities Expense
Purchased office furniture from Office Outfitters on account.
DR: Office Furniture
CR: A/R
A person or business to whom a liability is owed
creditor
The date terminology that is used for an Income Statement
"for the _____ ending _____"
Accounting will take place over a specific Fiscal Period
Time Period Concept