Chapter 2 and 3 Accounting Vocab

A list of accounts used by a business

Charts of Accounts

A business form ordering a bank to pay cash from a bank account is known

Check

A statement that guides the ethical behavior of a company and its employees

Code of Conduct

Assets =

Liabilities + Owner's Equity

The side of the account that is increased

Normal Balance

a check with a future date on it

Postdated check

a report of deposits, withdrawals, and bank balances sent to a depositor by a bank

Bank Statement

verifying that information on a bank statement and a checkbook are in agreement

A bank statement is reconciled by

Right Side

Credit

Assets are decreased

Credit Side

Liabilities are increased

Credit Side, Normal Balance

Capital account is increased

Credit side, Normal Balance

Left Side

Debit

Capital account is decreased

Debit Side

Liabilities are decreased

Debit Side

Assets are increased

Debit, Normal Balance

a check that a bank refuses to pay - check appears to be altered - the signature of the person who signed the check does not match the one on the signature card - the amounts written in figures and words do not agree - the check is postdated - the person who wrote the check has stopped payment on the check

Dishonored check

- write the amount of the check at the top of the stub - write the date of the check on the date line of the stub - write to whom the check is to be paid on the stub - record the purpose of the check on the FOR line - write the amount of the check in the amount column at the bottom of the stub next to AMT. This Check - calculate the new checking account balance and record the new balance on the line of the stub - write the date on the space provided on the check - write to whom the check is to be paid after Pay to the Order Of - write the amount of words on the line with the word DOLLARS - write the purpose of the check - sign the check

Preparing check stubs and checks

An accounting device used to analyze transactions

T-account

- One person transfers ownership to another person by signing on the back of a check. A signature or stamp on the back of a check transferring ownership is called an endorsements 1. An endorsement consisting only of the endorser's signature is called a blank endorsement. 2. An endorsement indicating a new owner of a check is called a special endorsement 3. An endorsement restricting further transfer of a check's ownership is called a restrictive endorsement- One person transfers ownership to another person by signing on the back of a check. A signature or stamp on the back of a check transferring ownership is called an endorsements 1. An endorsement consisting only of the endorser's signature is called a blank endorsement. 2. An endorsement indicating a new owner of a check is called a special endorsement 3. An endorsement restricting further transfer of a check's ownership is called a restrictive endorsement

Three types of endorsements