| A | B |
|---|
| double entry accounting | records debit and credit |
| t account | skeleton form shows increases/decrease |
| debit | left side of account |
| credit | right side of account |
| accounting cycle | steps that keep accounting records in orderly fashion |
| source document | evidence of accounting transaction |
| invoice | source document used in buying or selling |
| receipt | source document used when cash is received |
| memorandum | source document used within a business |
| checkstub | source document used when paying cash |
| journal | chronological record of business transactions |
| journalizing | process of recording transactions in a journal |
| general journal | all purpose journal |
| chart of accounts | list of all accounts and numbers |
| liquidity | ease in which asset can be converted into cash |
| slide | mistake 100 instead of 1000 |
| ledger | group of accounts |
| trial balance | proof of debits = credits in ledger |
| posting | transferring information from journal to ledger |
| correcting entry | after posting, a mistake is found |
| worksheet | working papers used to collect information |
| ruling | drawing a line |
| matching principle | matches expenses with revenue earned |
| net income | revenue greater than expenses |
| net loss | expenses greater than revenue |
| sole proprietorship | business owned by one person |
| partnership | business owned by 2 or more |
| corportion | business owned by stock holders |
| capital | money invested in a business by the owner |
| fiscal period | period of time covered by accounting report |
| business entity | business operates separately from individual |
| going concern | business will last forever |
| creditor | who you owe money to |
| assets | property owned by an individual |
| liabilities | creditors claims to the assets of a business |
| accounting equation | a = l + c |
| business transaction | economic event that causes a change in assets, liabilities, owners equity |
| account | record of the increases or decreases in a specific item |
| accounts receivable | total amount of money to be received in the future |
| accounts payable | amount of money owed to a business creditors |
| withdrawal | owners takes assets out of the business for personal use |
| expenses | any price paid for goods and services used to operate a business |
| revenue | income earned from the sale of goods and services |
| on account | when a business buys on credit |
| capital | dollar amount of the owners investments in the business |
| balance side | side used to record increases in the account |
| permanent account | continous accounts from one period to another |
| temporary capital accounts | revenue and expenses, start with 0 each period |
| revenue principal | revenue is recorded on date its earned even if not received |
| manual accounting system | info is recorded by hand |
| computerized accounting system | info is entered into computer |
| ledger account form | accounting stationery used to record financial info on specific accounts |
| proving the ledger | debits = credits |
| transposition | 489 as 498 |
| service business | provides a needed service for a fee |
| merchandiseing business | buys finished products and sells at a profit |
| manufacturing business | buys raw materials and transforms them into finished products |
| charter | legal permission given by a state for a corporation to operate |
| accounting clerk | entry level jobs in accounting |
| accountant | person who makes choices and decision about accounts and prepares financial reports |
