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15 terms

TCC Accounting Chapter 2

Recording business transactions.
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Account
The detailed record of the changes in a particular asset, liability, or owner's equity during a period. The basic summary device of accounting.
Accrued Liability
A liability for which the business knows the amount owed but the bill has not been paid.
Chart of Accounts
A list of all the accounts with their account numbers.
Compound journal entry
Same as a journal entry, except this entry is characterized by having multiple debits and/or multiple credits. The total debits still equal the total credits in the compound journal.
Credit
The right side of an account.
Debit
The left side of an account.
Journal
The chronological accounting record of an entity's transactions.
Ledger
The record holding all the accounts.
Normal Balance
The balance that appears on the side of an account - debit or credit - where we record increases.
Notes Payable
Represents debts the business owes because it signed promissory notes to borrow money to purchase something.
Note Receivable
A written promise for future collection of cash.
Posting
Copying amounts from the journal to the ledger.
Prepaid expenses
Expenses paid in advance for their use.
T-account
Summary device that is shaped like a capital "T" with debits posted on the left side of the vertical line and credits on the right side.
Trial Balance
A list of all the accounts with their balances.