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15 Cards in this Set
- Front
- Back
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The steps in the accounting process that focus on analyzing and recording transactions are (4)
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- Analyze each transaction from source documents.
- Record relevant transactions in a journal. - Post information to ledger accounts. - Prepare and analyze the trial balance. |
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Examples of source documents:
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sales tickets, sales invoices, checks, bank statements, and purchase orders.
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Define Trial Balance
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A list of all accounts and their balances at a point in time.
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Define Account
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An account is simply a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
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A compilation of all accounts is called a __________.
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General ledger
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Chart of Accounts...
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A list of accounts on the general ledger with account numbers.
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Increase Debit:
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- Assets
- Expenses - Dividends |
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Increase Credit
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- Liabilities
- Common Stock - Revenue |
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Define Account Balance
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The difference between the total debits and credits recorded in the account.
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Define Normal Balance of an Account
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Left or right side where the increases are recorded.
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A Journal..
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provides a complete record of each transaction in one place: shows debits and credits for each transaction in chronological order.
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Posting
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The process of transferring journal entry information to the ledger.
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A trial balance is a list of accounts and their balances. It proves..
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debits=credits
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Define Debt Ratio
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A way to assess the risk involved with a companies use of liabilities.
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Formula for debt ratio:
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Total Liabilities/Total Assets
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