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Description
Flashcards by Georgia Tan, updated more than 1 year ago
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Created by Georgia Tan
almost 9 years ago
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| Question | Answer |
| There are 6 steps to the accounting recording process. Name all 6 | |
| Debits mean ____, credits mean _______ | debits mean left, and credits mean right. |
| Impact of Debits/Credits on Assets & Expenses? | |
| Impact of Debits/Credits on Liabilities, Equity & Revenues? | |
| What is Double entry accounting | each transaction recorded has two sides—a debit and a credit. By making sure that the total of all debits always equals the total of all credits, we can also be sure that the accounting equation Assets = Liabilities + Owners’ Equity will always balance. |
| On Journal Entries: Every journal entry has ____ line for each account affected | 1 |
| On Journal Entries: There are always at least _____ accounts affected | 2 |
| On Journal Entries: The total of all debits must .... | equal the total of all credits |
| Journal entries are generally formatted with the _____ first, then _______ | debits credits |
| Each journal entry has a _____ associated with the entry | date |
| What is a disadvantage of journal entries? | A big list of transactions in the form of journal entries does not present data in a way that is very useful to summarize the transactions for the period. |
| What is a T Account | consolidate the list of all transactions that impact a particular account and show the overall impact on that account. |
| Every T-account has a ______and an ______ balance, though the balance may be zero | beginning ending |
| A T-account covers activity for a period of _______ | time |
| Every transaction will affect at least ____ T-accounts | 2 |
| If you add the ending balances of all T-accounts, | the total of all debits must equal the total of all credits |
| Cost of Goods sold =? | Expenses; comes under Owner's Equity |
| Sales are considered ____ | Revenue |
| Revenue comes under ___ | Owner's Equity |
| Prepayments from customers come under which part of the acctg equation? | Assets go up, cuz of cash received. Liabilities go up cuz of the obligation to pay increases. |
| How are prepayments categorized on the right side of the acctg equation? | Under Liabilities --> Deferred Revenue/Unearned Revenue |
| When there is deferred revenue, what happens over time as services are provided in lieu of the pre-payment? | liability account is debited (-), and OE is credited (+) |
| Is Deferred Revenue a Revenue account? | No. It is under Liabilities |
| Walk thru the steps of prepayment and it's exact impact on journal entries | 1. Cash D+, Liability C+ When service/goods are first purchased 2. Def Rev D-, Rev C+ 3. COGs D- , Inventory C- |
| What account does prepaid expense fall under? | Prepaid Expense is an asset account. It represents an amount that has been prepaid by the business, and thus the business now has the right to receive goods or services in the future. |
| Business pays $1200 in Prepaid Insurance for 1 year. What are the journal entries from Date of payment to the end of the first month? | 1. PP Insurance D(+), Cash C(-) [Assets] at the end of 1 month 2. PP Insurance C(-) by 100$, Expenses D(-) |
| After T-Accounts, what's the next step? | Creation of Trial Balance |
| When businesses are recording transactions in their financial records, they use smaller groupings called ___ | accounts |
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