Accounting chapter 3 study
Paid cash to owner as a withdrawal of equity:
Debit Drawing, Credit Cash
calculator tape:
is used for daily sales
Memorandum:
A form on which a brief message is written to describe a transaction.
Invoice:
A form describing the goods or services sold, the quantity, the price, and the terms of sale.
Journal:
A form for recording transactions in chronological order.
Receipt:
A business form giving written acknowledgement for cash received.
Check:
A business form ordering a bank to pay cash from a bank account.
Source Document:
A business paper from which information is obtained for a journal entry.
Sales Invoice:
An invoice used as a source document for recording a sale on account. A sales invoice is also referred to as a sales ticket or a sales slip.
Proving Cash:
Determining that the amount of cash agrees with the accounting records.
The journal columns used to record receiving cash from the owner as an investment are Cash Debit and Sales Credit:
False
Entry:
Information for each transaction recorded in a journal.
Journalizing:
Recording transactions in a journal.
Double-Entry Accounting:
The recording of debit and credit parts of a transaction.
Be able to:
analyze a transaction in a sentence format.
Objective evidence:
applied when a source document is prepared for each transaction
a receipt is used for:
cash received from transactions other than sales
to have a complete entry in the journal:
date, debit amount, credit amount, and a source document.
If an error is recorded in a journal entry:
draw a line through the error write the correct item above the error do NOT erase the item
In double-entry accounting:
each transaction affects at least two accounts.
Make sure to not:
erase errors you make if you write information down. Just strikethrough so you can show how you corrected it.
The date is written:
for each entry.
Do NOT enter "00" or "--" for the cents column:
if a dollar entry is an even amount.
Transactions are recorded:
in a journal in chronological order.
A single line ruled across the journal's amount columns:
indicates that columns are to be totaled.
Anything written down or recorded:
is considered permanent information.
write "carry forward":
on the bottom line of the first page
write "brought forward":
on the top line of the second page
Cash is always:
proved at the end of the month
Double lines are ruled underneath the total column amounts:
to verify that the totals are correct
all cash payments:
use a check
Every business does NOT:
use the same journal to record transactions.
memorandums are used:
when supplies are bought on account