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19 terms

Accounting 101 - Chapter 2

Chapter 2
STUDY
PLAY
Source Documents
identify and describe transactions and events entering the accounting process.
Account
is a record of increases and decreases in a specific asset, liability, equity, revenue or expense item.
General Ledger / Ledger
is a record containing all accounts used by a company.
Unearned Revenue
refers to a liability that is settled in the future when a company delivers its products or services.
Owner, Capital
When an owner invests in a company, the invested amount is recorded in an account titled Owner, Capital (where the owner's name is inserted in place of "owner")
Owner, Withdrawals
The Owner, Withdrawals account is used to record asset distributions to the owner.
Chart of Accounts
is a list of all accounts a company uses and includes an identification number assigned to each account.
T-Account
represents a ledger account and is a tool used to understand the effects of one or more transactions
L Side of T-Account
Debit (DR)
R Side of T-Account
Credit (Cr2)
Account Balance
The difference between total debits and total credits for an account , including any beginning balance, is the account balance
Double-entry accounting
requires that each transaction affect, and be recorded in, at least two accounts.
Journal
gives a complete record of each transaction in one place.
Journalizing
is the process of recording transactions in a journal.
Posting
The process of transferring journal entry information to the ledger is called posting.
General Journal
can be used to record any transaction and includes the following information about each transaction: (1) date of transaction (2) titles of affected accounts (3) dollar amount of each debit and credit (4) explanation of the transaction.
Posting Reference (PR) column
identification numbers of the individual ledger accounts
Balance column accounts
same as t-account, but includes transaction date and explanation columns.
Trial Balance
is a list of accounts and their balances at a point in time.