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Acct. & Transactions
Accounting Ch. 2 - Analyzing and Recording Transactions
| Term | Definition |
|---|---|
| source documents | documents that identify and describe transactions and events entering the accounting system |
| account | a record of increases and decreases in a specific asset, liability, equity, revenue, or expense |
| general ledger | or ledger; a record of all accounts and their balances |
| creditors | individuals and organizations that have rights to receive payments from a company |
| debtors | those who owe money |
| unearned revenue | a liability that is recorded when customers pay in advance for products or services |
| chart of accounts | a list of all ledger accounts with an identification number assigned to each account |
| T-account | represents a ledger accounting and is used to show the effects of transactions |
| debit | term describing the left side of a T-account |
| credit | term describing the right side of a T-account |
| account balance | the difference between total debits and total credit for an account, including any beginning balance |
| double-entry accounting | demands the accounting equation remain in balance |
| double-entry accounting rules | 1) at least 2 accounts are involved, with at least one debit and one credit 2) total amount debited must equal total amount credited |
| journal | a complete record of each transaction in one place |
| journal | shows debits and credits for each transaction |
| journalizing | the process of recording transactions in a journal |
| posting | the process of transferring journal entry information to the ledger |
| general journal | used by every company to record any transaction |
| posting reference (PR) column | the identification number of an individual ledger account |
| balance column accounts | differ from T-accounts in setup and are more structured |
| trial balance | a list of all ledger accounts and their balances at a point in time |
| debt ratio | total liabilities/total assets |
Created by:
Kendall Posey
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