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.