OA 213 Chapter 3 Quiz

journal entry

transaction (debits and credits) that is recorded into a journal once it is analyzed.

posting

transferring, copying, or recording of information from a journal to a ledger

fiscal year

> accounting period that runs for 12 consecutive months > can be something other than a calendar year

cross referencing

> adding to the PR column of the ledger account that was updated from the journal > points from one place to another

journal

> listing of business transactions in chronological order > links on one page the debit & credit parts of transactions

four-column account

> running balance account that records debits & credits and has a column for an ending balance (debit or credit) > replaces the standard 2 column account

transposition

accidental rearrangement of digits of a number > example: 152 -> 125

book of final entry

book that records information about business transactions from a book of original entry > example: a ledger

book of original entry

book that records the 1st formal information about business transactions (journal)

natural business year

ending fiscal year when inventories & business activities are at a low point

slide

error that results in adding or deleting zeros in the writing of a number > example: 79,200 -> 7,920

interm reports

financial statements that are prepared for a month, quarter, or some other portion of a fiscal year

accounting cycle

for each accounting period, the process that begins with the recording of business transactions into a journal & ends with the completion of a post-closing trial balance

trial balance

informal listing of the ledger accounts & their balances in the ledger to aid in proving the equality of debits & credits

calendar year

january 1 - december 31

compound journal entry

journal entry that affects more than 2 accounts

accounting period

period of time for which an income statement is prepared

journalizing

process of recording a transaction into the journal