| A | B |
|---|
| Asset | What the business owns. |
| Liability | Who the business owes. |
| Capital | Net worth. |
| Drawing | An account to keep track of withdrawals by owner for personal use. |
| Revenue | An increase in owner's equity resulting from operating the business. |
| Expense | A decrease in owner's equity resulting from operating the business. |
| Opening the Ledger | Writing the account title and account number at top of each account. |
| Posting | Transfering information from the journal to the ledger. |
| Account | A form used to sort and summarize financial information. |
| Ledger | A book that contains accounts. |
| Trial Balance | Proves D = C in ledger accounts after posting. |
| Transaction Analysis | The process of determining the debit and credit part of a journal entry. |
| Business Transaction | The exchanging of one value for another. |
| Balance Sheet | A report that shows A=L+OE on a specific date. |
| How to calculate profit. | Profit = Revenue - Expenses |
| The Accounting Equation | A = L + OE |
| Which accounts have a Debit Balance? | Assets, Drawing, and Expenses. Remember Debitade. |
| What accounts have a Credit Balance? | Liabilities, Owner's Equity (Capital), and Revenue. Remember Debitade. None of these start with a or d or e. |
| Increase side of an account is always the _______ side. | increase |
| The side opposite the balance in an account is always the ________ side. | decrease |
| Study Workbook Page 24 | Study Workbook Page 24. |
| Study the 5 steps followed in Problems 4-1, 4-2, 4-M. | See your notes and learn them. |
| Balance Side of an Asset | Debit |
| Balance Side of a Liability | Credit |
| Balance Side of Owner's Equity | Credit |
| Balance Side of Revenue | Credit |
| Balance Side of an Expense | Debit |
| Balance Side of Drawing | Debit |
| When is the Drawing account used? | When the owner withdraws cash (or any asset) for personal use. |
