Chapter 5 FUNAC
T Account
Its shape comes from the letter T
journal entry
Every entry made in general journal is called
book of original entry
General Journal- entries are recorded in one place. For these reasons, the transactions are initially recorded in the journal which is also called
credit balance
If the credit total is higher than the debit total, the account balance is called
debit balance
If the debit total is higher than the credit total, the account balance is called
Two Column General Ledger
If there are only two money columns, one for the debit postings and another for the credit postings. This is usually called
Ledger
In the general ledger, a separate page is maintained for each account. Each page is called?
Simple journal entry
Journal entry with one debit and one credit
credit balances.
Liabilities, revenues and the owner's capital have WHAT balances?
A balance on the credit particular column is usually placed for WHAT TITLES
liability, capital or revenue account.
Trial balance
list of accounts with ledger balances.
Journalization
the process of recording in general journal book is called
T Account
the simplest tool used to analyze the effects of the transactions on each account, , hence it has two sides: one side for recording increases and the other side for recording decreases.
Give the 4 steps in Accounting Cycle
1. collecting data based on various documents or business papers. 2. journal 3. ledger 4. trial balance.
WHAT accounts normally have balances on the debit particular column
Asset, drawing and expense accounts
Concept
Note that the transactions are recorded chronologically , and that the debit entry is recorded first. The debits and credits of each account are recorded chronologically by day.
Venetian Model
Other term for Double Entry Bookkeeping System
General Ledger concept
Since there is no money column for the balance, a particular column is provided on each side but the balance of the account is placed only on one side usually at the end of the month.
account balance
The difference between the debit total and the credit total
debit side
The left part of the T account
Chart of Account concept
The number and the nature of accounts depend on the type of business operation. The accounts are properly arranged with the assets listed first, followed by the liabilities and lastly by the owner's equity.
he transactions must always affect two accounts (ex. cash and capital) and at least one or two accounting elements (ex. assets only or assets and owner's equity). WHY?
The reason is that a transaction is an exchange of value: one value received and another value parted with.
credit side
The right part of the T account
Business Papers
These are source documents evidencing transactions of a business.
Trial balance
WHERE establish again the equality of the debits and credits by using tool called?
compound journal entry
When an entry has more than one debit or more than one credit
STATEMENT OF ACCOUNT
a bill presented to a customer for service rendered or merchandise given for which payment is demandable.
account
a device used to record the increases and decreases affecting each of the different assets, liabilities and owner's equity.
Cash voucher or Check voucher
a document used when cash is paid or a check is issued.
general ledger
a formal book of accounts which is used in actual practice
general ledger
a separate page is maintained for each account.
journal
analyzing and recording documents in a book called
Debit Balances
assets, owner's drawing and the expense accounts have WHAT balances?
Other term for General Journal
book of original entry
1st step of Accounting Cycle
collecting data based on various documents or business papers.
Particulars column
describes the transaction, followed by either a debit or credit posting copied from the journal.
Trial balance concept
double entry bookkeeping rule extends to the trial balance - ensure that the debit total is the same as the credit total
Concept
every transaction entry must have a debit equal to a credit no matter how many accounts are affected just like in the last transaction.
Double Entry Bookkeeping System or Venetian Model
every transaction entry must have a debit equal to a credit no matter how many accounts are affected just like in the last transaction. This is called?
4th step in Accounting Cycle
extracting the balances of each of the accounts found in the ledger and preparing a trial balance.
two-column general journal
he simplest form of journal is what?
F or page reference
identifies the source of the entry such as journal
2nd step in Accounting Cycle
involves analyzing and recording documents in a book called the journal.
ledger
involves classifying and posting from the journal to another book called
3rd step in Accounting Cycle
involves classifying and posting from the journal to another book called the ledger.
Two Column General Ledger
is similar in format to the T account although formal in structure.
Official receipt
issued when cash is received by the entity.
Invoice
issued when service or merchandise is given to a customer or client.
Chart of Account
listing of account titles that guides the bookkeeper in the recording of the transactions.
Check
negotiable instrument used as a substitute for cash, the payment for which is drawn against the entity's or individual's current account.
Three Column General Ledger
three money columns involved, this format is called?
T Account
used by accountants to analyze transactions and immediately determine balances of accounts.
Double Entry Bookkeeping System or Venetian Model
was introduced by Luca Pacioli
Zero account balance
when the debit total is equal to the credit total.
PROMISSORY NOTE
written promise to pay a certain sum of money at a future date.