Chapter 2 The Recording Process

What is an Account? An account is a record of increases and decreases in specific assets, liabilities, or owner’s equity. What is Normal balance of an account? A normal balance of an account is the side on which the account is increased. For example, Accounts Receivable has a debit normal balance because Accounts Receivable is an asset and assets are increased by debits (per Rule of Accounting # 1 for assets). How do you Find Owner’s Equity? We find owner’s equity by subtracting total liabilities from total assets. What is a simple journal entry? A simple journal entry is an entry that requires one debit and one credit. What is a compound entry? A compound journal entry contains more than one debit of credit. What is Double Entry System? Double Entry Bookkeeping System is an organized way to record in appropriate accounts the dual effect of each transaction. This is the system that Luca Pacioli included in his textbook. What is posting? Posting is the transferring of information from the journal to the general ledger. What is a Chart of Accounts? A Chart of accounts is a list of accounts and their numbers that specify their location in the general ledger. What is a Trial Balance? A trial balance is a list of accounts and their balances at a specific point in time, prepared in order to prove out the equality of the debits and the credits. What is a Journal? A journal is a book of original entry in which transactions are recorded in chronological order. What is a Three-column form of account? It is a form with columns for debit, credit, and running or cumulative balance amounts in an account. What is a T account? A T account is the most basic form of account. Ch1 Accounting in Action Ch2 Recording Process Ch3 Adjusting the Accounts Ch4 Completing the Accounting Cycle Ch5 Merchandising Operations Ch6 Inventories Ch7 Accounting Information Systems Ch8 Internal Control and Cash Ch9 Accounting for Receivables Ch10 PP&E, Natural Resources, and Intangible Assets Ch11 Current Liabilities and Payroll Ch12 Partnerships Ch13 Corporations Ch14 Corporations:Dividends, RE Ch15 Long Term Liabilities Ch16 Investment Ch17 Statement of Cash Flows Ch18 Financial Statement Analysis Plato and Accounting Price/Earnings Ratio Plant Assets Luca Pacioli and DaVinci The secrets of 'no-doze' prose: Mary Duffy's Sentence Openers Image via Wikipedia Lindsey Vonn

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