Term
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Definition
- quick simple tools to see how a small number of transactions and events will impact a company - debits on the left, credits on the right - the "balance" is the amount by which debits exceed credits (or vice versa) - for very transaction debits= credits |
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Term
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Definition
1. assets: debits(+), credits(-) 2. liabilities: debit(-), credit(+) 3. equity: debit(-), credit(+) *D-E-A-D= Debits increase Expenses, Assets, and Dividends* |
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Term
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Definition
- accounts - general ledger - debits and credits - journals |
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Term
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Definition
- records that are kept for each asset, liability, revenue, expense, and dividend component of an entity - all accounts comprise a general ledger - control accounts should be reconciled w/ subsidaries |
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Term
Analyzing and Recording Process |
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Definition
1. Analyze each transaction and event from source documents 2. record relevant transactions and events in a journal 3. post journal information to ledger accounts 4. prepare and analyze the trial balance |
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Term
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Definition
- evidence of a transaction or vent: checks, purchase orders, bills from suppliers, bank statements, employee earnings records |
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Term
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Definition
- a chronological listing of transactions and events(documented in debit/credit format) - aka "book of original entry" - list debits first(flush left), then credits(indented right) - compound entry may involve more than two accounts |
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Term
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Definition
- a record of accounts comprising the financial statements and their balances |
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Term
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Definition
- a listing of the ledger accounts along w/ their respective debit or credit balances - not a formal financial statement - self-check to determine that debit equals credit |
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Term
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Definition
_ Basic Process: transfer amounts from the general ledger to the trial balance, then into the financial statements |
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Term
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Definition
- total liabilities/total assets - evaluates the level of debt risk - a higher ratio indicates that there is a greater probability that a company will not be able to pay its bills in the future |
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