Accounting Foundations & Terms
The account used to summarize the owner's equity in a business.
Capital
An amount recorded on the right side of a T-account.
Credit
This type of check endorsement restricts further transfer of a check's ownership (e.g., writing "For Deposit Only").
Restrictive Endorsement
This specific financial statement reports assets, liabilities, and owner's equity on a single, specific date.
Balance Sheet
I give this document when I make a sale on account.
Sales Invoice
This country is the largest in the world by land mass, spanning across both Europe and Asia.
Russia
Based on the expenses listed for Advertising ($450), Insurance ($157), Miscellaneous ($85), Supplies ($1,400), and Utilities ($1,641), give me the exact journal entry to close these accounts.
Income Summary Debit $3,733
Ad. Expense Credit $450
Insurance Expense Credit $157
Misc. Expense Credit $85
Supplies Expense Credit $1,400
Utilities Expense Credit $1,641
Financial reports that summarize the financial condition and operations of a business.
Financial Statements
When an owner withdraws cash from a business, the owner’s drawing account is affected in this specific way.
Increased by a debit
Once a check has been cashed and deposited into your account it becomes this.
Cancelled Check
If total expenses are greater than total revenue during a fiscal period, the financial statements will report this outcome.
Net Loss
Accounts that start every single new fiscal period with a zero balance.
Temporary accounts
This classic piece of playground equipment features a long board balanced on a central fulcrum, allowing one person to go up while the other goes down.
Seesaw (or teeter-totter)
In accounting this is the term used when you owe someone something.
Liability
The normal balance side of a general ledger account is always located on this side.
The side used to increase the account
These accounts are debited every time we replenish the petty cash account.
Expenses
Statement of Owner's Equity
This is the very last step in the accounting cycle.
Preparing the Post-Closing Trial Balance
This fictional detective, created by author Sir Arthur Conan Doyle, famously lived at 221B Baker Street in London.
Sherlock Holmes
Accounts that are continuous from one accounting period to the next and carry their balances forward rather than being zeroed out.
Permanent accounts
This is the correct adjusting journal entry required to update the Prepaid Insurance account at the end of a fiscal period.
Debit Insurance Expense and credit Prepaid Insurance
When reconciling a checking account a check mark on this shows that the bank has accounted for that check on the bank statement.
Check stub
Expense and income ratios are calculated using the number.
At the end of a fiscal period, this represents the very first closing entry made in the journal.
Revenue accounts into the Income Summary account
In the sport of bowling, this is the specific term used when a player rolls three strikes in a row.
Turkey
This list of all accounts used by a business typically begins with assets, followed by liabilities and owner's equity.
Chart of Accounts
When a business has a net loss for a fiscal period, this is the journal entry required to close the Income Summary account into Capital.
Debit to Owner’s Capital and credit to Income Summary
A bank statement shows a balance of $4,200. There are outstanding checks of $600 and an outstanding deposit of $300. This is the reconciled cash account balance.
$3,900 (Calculation: $4,200 - $600 + $300)
Given a beginning capital of $55,000, a net income of $8,799, an owner withdrawal of $5,000, and an additional investment of $2,500, this is the ending owner's capital.
$61,299? (Calculation: $55,000 + $8,799 - $5,000 + $2,500)
This is the source document used when someone pays me by cash or check.
Receipt
This 3D puzzle originally called magic cube, was invented in 1974 by a Hungarian architecture professor.
Rubix Cube