Accounting Cycle: Steps 1-4
What is the term for the cost of goods or services used to operate a business?
expense
True or False. Accounts Payable are an asset account.
false
What is the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current?
file maintenance
True or False. When analyzing accounts, debits must equal credits for each transaction.
true
What source document is used for the daily total of cash sales?
calculator tape
What is the first step in the Accounting Cycle?
collecting and verifying source documents
What is the normal balance of an Accounts Receivable account?
debit
Which source document is used when there is no other source document for a transaction?
memorandum
What is the difference between assets and liabilities?
net worth/equity
What is the fourth step of the Accounting Cycle?
posting to the general ledger
What is accounting?
the process of planning, recording, analyzing, and interpreting financial information
What does an asset account number begin with?
1
What are the two types of accounts used when preparing a Chart of Accounts?
Balance sheet and Income statement
What does an expense account number begin with?
5
Where are transactions recorded with many transactions on the same page?
general journal
Which side of the chart of accounts tells what the company is worth?
left side
What is a written acknowledgement for cash received other than sales?
receipt
Which two accounts under Owner's Equity have a normal balance of credit?
sales and capital
What are the two accounts on the right side of the chart of accounts?
sales and expenses
What is the source document used when services are sold on account?
sales invoice