| A | B |
|---|
| Accounts with a normal debit balance | cash, supplies, prepaid insurance, owner's drawing account,expenses |
| Accounts with a normal credit balance | owner's capital account, Sales, |
| When cash is decreased | Cash is Credited |
| When cash is increased | Cash is Debited |
| Paid cash for supplies | Cash Credit, Supplies Debit |
| Received cash from owner as an investment | Cash Debit, Owner's Capital Credit |
| Paid cash for insurance | Cash Credit, Prepaid Insurance Debit |
| Bought supplies on account from Rochester Supply | Supplies Debit, Rochester Supply Credit |
| Paid cash on account to Rochester Supply | Rochester Supply Debit, Cash Credit |
| Received cash from sales | Cash Debit, Sales Credit |
| Paid cash for rent | Rent Expense Debit, Cash Credit |
| Paid cash to owner for personal use | Owner's Drawing Debit, Cash Credit |
| The amounts on both sides of the accounting equation | must be in balance (equal) |
| Assets=Liabilities + Owner's Equity | the accounting equation |
| An example of a contra account is the account | Drawing |
| double-entry accounting | The recording of debit and credit parts of a transaction |
| entry | Information for each transaction recorded in a journal |
| general amount column | A journal amount column that is not headed with an account title |
| invoice | A form describing the goods or services sold, the quantity, and the price |
| journal | A form for recording transactions in chronological order |
| journalizing | Recording transactions ina journal |
| memorandum | A form on which a brief message is written describing a transaction |
| proving cash | Determining that the amount of cash agrees with the accounting records |
| receipt | A business form giving written acknowledgement for cash received |
| sales invoice | An invoice used as a source document for recording a sale on account |
| source document | A business paper from which information is obtained for a journal entry |
| special amount column | A journal amount column headed with an account title |
| When correcting an error in a journal | Neatly draw a line through the incorrect entry and write the correct item immediately above the canceled item |
| Write the year and month | Once on a journal page |
| A single line ruled across the journal's amount columns indicates | columns are to be totaled |
