| Question |
Answer |
| asset |
anything of value that is owned |
| equities |
financial rights to the assets of a business |
| liability |
an amount owned by a business |
| Owner's equity |
the amount remaining after the value of all liabilities is subtracted from the value of all assets |
| Accounting Equation |
an equation showing the relationship among assets, liabilities, and owner's equity |
| Source Document |
Information about business transaction is obtained from original business papers |
| Journal |
a form for recording transactions in chronological order |
| Special Journal entry |
a journal used to record only one kind of transaction |
| Double-entry accounting |
the recording of debit and credit parts of a transaction |
| Account |
a record summarizing all the information pertaining to a single item in the accounting equation |
| Ledger |
a group of accounts |
| General Ledger |
a ledger that contains all accounts needed to prepare financial statements |
| Subsidiary Ledger |
a ledger that is summarized in a single general ledger account |
| Controlling account |
an account in a general ledger that summarizes all accounts in a subsidiary ledger |
| File maintenance |
the procedure for arranging accounts in a general ledger assigning account numbers and keeping records |
| Departmental accounting system |
an accounting system showing accounting information for two or more departments |
| Merchandising business |
a business that purchased and sells good |
| Posting |
Transferring information from a journal entry to a ledger account |
| Debit memorandum |
a form prepared by the customer showing the price deduction taken by the customer for returns and allowances |
| Contra account |
an account that reduces a related account on a financial statement |
| Contra balance |
an account balance that is opposite the normal balance |
| Cash discount |
a deduction that a vendor allows on the invoice amount to encourage age prompt payment |
| Purchases discount |
a cash discount taken by a customer |
| Petty cash |
an amount of cash kept on hand and used for making small payments |
| Bank statement |
a report of deposits, withdrawals, and bank balances sent to a depositor by a bank |
MedTemCP5 Word+Pics
