Key Terms
A system of collecting, storing, and processing financial information and accounting data used by managers
Accounting system
Paid rent by bank transfer, $2500
Debit Rent Payable Account $2500
Credit Bank Account $2500
Left-hand side of an account where what is received is recorded
Debit side
Right-hand side of an account where what is given is recorded
Credit Side
The account that records the money invested in a business by its owner(s)
Capital Account
A system of recording financial transactions that recognizes there are two sides to every transaction
Double-entry bookkeeping
Purchased more stock for shop to the value of $3000 for resale
Debit Purchases Account $3000
Credit Bank Account $3000
Which account should be debited?
Carriage (shipping) outwards paid by check
Carriage (shipping) outwards
Which account should be credited?
Received a banks loan via a bank transfer
Bank Loan
The account in which we record the sales of goods
Sales Account
A book or computer file containing accounts
Ledger
Withdrew $200 from the business bank account for private use
Debit Drawings Account $200
Credit Bank Account $200
Which account should be debited?
Withdraw money from bank account for personal use
Drawings Account
Which account should be credited?
Returned some damaged phone covers bought for resale purposes
Purchases Returns Account
The account in which we would record a refund given of any money already paid because goods are faulty or incorrect goods were delivered
Sales Returns Account
A history of all financial transactions of a similar nature. Also known as a “T” account.
Ledger account
Returned some damaged goods to the value of $60
Debit Bank Account $60
Credit Purchases Returns Account $60
Which account should be debited?
Paid general expenses by check
Expenses Account
Which account should be credited?
Owner deposited capital contribution into the business bank account
Capital Account
What do we call the account in which we record rent paid to the business
Rent Receivable
the process of recording financial transactions in ledger accounts
Posting
Received rent payment $1,000,000,000
Debit Bank Account $1,000,000,000
Credit Rent Receivable Account $1,000,000,000
Which account should be debited?
Returned unwanted goods to supplier and received refund by bank transfer
Bank Account
Which account should be credited?
Paid rent by debit card
Bank Account
What do we call the account in which we record loans that the business receives
Loan Account