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sccounting sem final
| Term | Definition |
|---|---|
| an amount owed by a business | liability |
| an equation showing the relationship among assets, liabilities, and owner's equity | accounting equation |
| the difference between assets and liabilities | equity |
| a business that performs an activity for a fee | service business |
| a business owned by one person | proprietorship |
| assets taken out of a business for the owner's personal use | withdrawals |
| a business activity that changes assets, liabilities, or owner's equity | transaction |
| financial reports that summarize the financial conditions and operations of business | financial statements |
| the amount remaining after the value of all liabilities os subtracted from the value of all assets | owner's equity |
| a sale for which cash will be received at a later date | sale on account |
| a form on which a bruef message is written to describe a transaction | memorandum |
| the recording of debit and credit parts of a transaction | double entry accounting |
| a business form ordering a bank to pay cash from a bank account | check |
| a business form giving written acknowledgment for cash received | receipt |
| a business paper from which information is obtained for a journal entry | source document |
| an invoice used as a source document for recording a sale on account | sales invoice |
| a form for recording transactions in chronological order | journal |
| information for each transaction recorded in a journal | entry |
| determining that the amount of cash agrees with the accounting records | proving cash |
| recording transactions in a journal | journalizing |
| decreases to liability accounts are recorded on the credit side | false |
| if the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit | false |
| payments for advertising, equipment repairs, utilities, and rent are liabilities | false |
| each asset account has a normal credit balance | false |
| if an error requires a correcting entry, the source document describing the correction to be made | is a memorandum |
| the left side of a T account is the | debit side |
| the procedure for transferring information from a journal entry to a ledger account is | posting |
| when cash is received on account, the amount is recorded in the | accounts receivable credit column and Cash Debit column |
| the normal balance side of a liability account is the | credit side |
| an account number in the journal's Post. Ref. column shows | the account to which an amount is posted |
| the entry to record payment of cash to the owner as a withdrawal of equity is | debit Drawing, credit Cash |
| if both amounts on a journal line are recorded in special amount columns | neither amount is posted individually |
| when cash is paid for rent, the amount is recorded in the | Cash Credit column and General Debit column |
| if an amount is recorded on the side of a T account opposite the normal balance side, the account balance is | decreased |
| when cash is received from sales, the amount is recorded in the | Sales Credit column and Cash Debit column |
| when an owner invests cash in a business, the owner's capital account is | decreased by a debit |
| the first digit in the acount number 520 means that the account is in the | expense division of the general ledger |
| if posting is interrupted, the accounting personnel know to resume posting | on the line with a blank Post. Ref. column in the journal |
| when a business pays cash on account, a liability account is | decreased by a debit |
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