| A | B |
|---|
| Account | a record within an accounting system where increases and decreases in a specific asset, liability, equity, revenue, or expense are entered and stored |
| Account balance | the difference between total debits and total credits (including the beginning balance) for an account |
| Balance column account | an account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry |
| Chart of accounts | a list of accounts used by a company; includes an identification number for each account |
| Compound journal entry | a journal entry that affects at least three accounts |
| Credit | recorded on the right side; an entry that decreases asset and expense accounts, and increases liability, equity, and revenue accounts; abbreviated Cr. |
| Debit | recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, equity, and revenue accounts; abbreviated Dr. |
| Debt ratio | the ratio of total liabilities to total assets; used to reflect risk associated with a company's debts |
| Double-entry accounting | an accounting system in which each transaction affects at least two accounts and has at least one debit and one credit |
| Events | happenings that both affect an organization's financial position and can be reliably measured |
| External transactions | exchanges of economic consideration between one entity and another entity |
| General journal | a record of the debits and credits of transactions and events |
| Internal transactions | activities within an organization that can affect the accounting equation |
| Journal | a record where transactions are recorded before they are posted to ledger accounts; also called book of original entry |
| Journalizing | process of recording transactions in a journal |
| Ledger | record containing all accounts (with amounts) for a business |
| Note payable | written promise to pay a definite sum of money on demand or on a specific future date(s); also called promissory note |
| Posting | process of transferring journal entry information to the ledger |
| Posting reference (PR) column | a column in journals where individual account numbers are entered when entries are posted to ledger accounts |
| Source documents | the source of information for accounting entries and can be in either paper or electronic form; also called business papers |
| T-account | an account form used as a tool to show the effects of transactions and events on individual accounts |
| Trial balance | list of accounts and their balances at a point in time; total debit balances equal total credit balances |
| Unearned revenue | a liability created when customers pay in advance for products or services; earned when the products or services are delivered in the future |
