| A | B |
|---|
| account | a record summarizing all the information pertaining to a single item in the accounting equation |
| accounting equation | an equation showing the relationship among assets, liabilities, and owners’ equity |
| asset | anything of value that is owned |
| cash discount | a deduction that a vendor allows on the invoice amount to encourage prompt payment |
| contra account | an account that reduces a related account on a financial statement |
| controlling account | an account in a general ledger that summarizes all accounts in a subsidiary ledger |
| debit memorandum | a form prepared by the customer showing the price deduction for purchases returns and allowances |
| departmental accounting system | : an accounting system showing accounting information for two or more departments |
| double-entry accounting | the recording of debit and credit parts of a transaction |
| file maintenance | the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current |
| general ledger | a ledger that contains all accounts needed to prepare financial statements |
| journal | a form for recording transactions in chronological order |
| ledger | a group of accounts |
| liability | an amount owed by a business |
| merchandising business | a business that purchases and sells goods |
| owners’ equity | the amount remaining after the value of all liabilities is subtracted from the value of all assets |
| petty cash | an amount of cash kept on hand and used for making small payments |
| posting | transferring transaction information from a journal entry to a ledger account |
| purchases discount | a cash discount on purchases taken by a customer |
| source documents | original business papers from which information about business transactions is obtained |
| special journal | a journal used to record only one kind of transaction |
| stockholders’ equity | stockholders’ equity: the owners’ equity in a corporation |
| subsidiary ledger | a ledger that is summarized in a single ledger account |
