Account
Record within an accounting system in which increases and decreases are entered and stored in a specific asset, liability, equity, revenue, or expense.
Account Balance
Difference between total debits and total credits (including the beginning balance) for an account.
Balance Column Account
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
List of accounts used by a company; includes an identification number for each account.
Credit
Recorded on the right side; an entry that decreases asset and expense accounts, and increases liability, revenue, and most equity accounts; abbreviated Cr.
Debit
Recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, revenue, and most equity accounts; abbreviated Dr.
Debt Ratio
Ratio of total liabilities to total assets; used to reflect risk associated with a company's debts.
Double Entry Accounting
Accounting system in which each transaction affects at least two accounts and has at least one debit and one credit.
General Journal
All-purpose journal for recording the debits and credits of transactions and events.
Journal
Record in which transactions are entered before they are posted to ledger accounts; also called book of original entry.
Owner, Capital
Account showing the owner's claim on company assets; equals owner investments plus net income (or less net losses) minus owner withdrawals since the company's inception; also referred to as equity.
Posting
Process of transferring journal entry information to the ledger; computerized systems automate this process.
Posting (PR) Reference
A column in journals in which individual ledger account numbers are entered when entries are posted to those ledger accounts.
Source Documents
Source of information for accounting entries that can be in either paper or electronic form; also called business papers.
Trial Balance
List of accounts and their balances at a point in time; total debit balances equal total credit balances.