Concept explainers
Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter.
Event
External event
Internal event
Transaction
Source document
Account
Chart of accounts
General ledger
Debit
Credit
Double-entry system
Journal
Posting
Journalizing
General journal
- A numerical list of all accounts used by a company.
- A list of each account and its balance; used to prove equality of debits and credits.
- A happening of consequence to an entity.
- An entry on the right side of an account.
- An event occurring entirely within an entity.
- A piece of paper that is used as evidence to record a transaction.
- The act of recording
journal entries. - An entry on the left side of an account.
- The process of transferring amounts from a journal to the ledger accounts.
- An event involving interaction between an entity and its environment.
- A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders’ equity.
- A book, a file, a hard drive, or another device containing all of the accounts.
- A chronological record of transactions.
- Any event that is recognized in a set of financial statements.
- The journal used in place of a specialized journal.
- A system of accounting in which every transaction is recorded with equal debits and credits and the
accounting equation is kept in balance.
Concept Introduction:
Accounting is art of recording, classifying and summarizing the business transaction or business event it also communicates or interpretation the result to the users of accounting.
Journal entries are the part of basic accounting or primary accounting. In journal entries there are 2 aspects one is debit and another is credit. These 2 aspects are always equal. Journal entries are base for the ledger and trial balance.
To Identify: Fill in the blanks with appropriate headings.
Explanation of Solution
1. A numerical list of all the accounts used by the company. | It is termed as the ledger. |
2. A list of accounts and its balances used to prove equality of debit and credit. | It is termed as the Trial balance. |
3. A happening of consequence to an entity. | It is termed as the Event. |
4. An entry on the right side of an account. | It is termed as the Credit. |
5. An event occurring entirely within an entity. | It is termed as Internal Event. |
6. A piece of paper that is used as evidence to record a transaction. | It is termed as Source document. |
7. The act of recording the journal entry. | It is termed as journalizing. |
8. An entry on the left side of an account. | It is termed as Debit. |
9. The process of transferring the amounts from a journal to the ledger accounts. | It is termed as posting. |
10. An event involving interaction between an entity and its environment. | It is termed as external event. |
11. A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders’ equity. | It is termed as general ledger. |
12. A book, a file, a hard drive, or another device containing all of the accounts. | It is termed as Account. |
13. A chronological record of transaction. | It is termed as Journal. |
14. Any event that is recognized in a set of financial statements. | It is termed as Transactions. |
15. The journal used in place of a specialized journal. | It is termed as General Journal. |
16. A system of accounting in which every transaction is recorded with equal debits and credits and the accounting equation is kept in balance. | It is termed as Double entry System. |
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Chapter 3 Solutions
Financial Accounting: The Impact on Decision Makers
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- List the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactionsarrow_forwardPosting: involves transferring the information in journal entries to the general ledger. is an optional step in the accounting cycle. is performed after a trial balance is prepared. involves transferring information to the trial balance.arrow_forwardUse the journals and ledgers that follows. Total and rule (draw a line under the column of numbers) the journals. Post the transactions to the subsidiary ledger and (using T-accounts) to the general ledger accounts. Then prepare a schedule of Accounts Payable.arrow_forward
- Arrange the following steps in the posting process in correct order: a. The amount of the balance of the ledger account is recorded in the Debit Balance or Credit Balance column. b. The amount of the transaction is recorded in the Debit or Credit column of the ledger account. c. The ledger account number is recorded in the Post. Ref. column of the journal. d. The date of the transaction is recorded in the Date column of the ledger account. e. The page number of the journal is recorded in the Post. Ref. column of the ledger account.arrow_forwardWhich of the following accounting records is the main source of information used to prepare the financial statements? A. journal entries B. T-accounts C. trial balance D. chart of accountsarrow_forwardUsing the following revenue journal for Zeta Services Inc., identify each of the posting references, indicated by a letter, as representing (1) posting to general ledger accounts or (2) posting to subsidiary ledger accounts:arrow_forward
- The debits and credits from two transactions are presented in the following customer account: Describe each transaction and the source of each posting.arrow_forwardWhich process of the accounting cycle often requires the most analytical thought? A. making a journal entry B. posting transactions to accounts C. summarizing the trial balance D. preparing the financial statementsarrow_forwardWhen preparing a trial balance, which of the following is correct? a. The purpose of the trial balance is to prove that the total of all debit balances equals the total of all credit balances. b. Advertising Expense would normally be recorded as a credit. c. The trial balance is considered to be a financial statement. d. Supplies would normally be recorded as a credit.arrow_forward
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