C3: DEBITS & CREDITS Flashcards

1
Q

The balance (debit or credit) that an account is normally expected to have.

A

Normal Balance

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2
Q

Assets, expenses, and losses normally have ___________.

A

Debit balances

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3
Q

Liabilities, shareholders’ equity, revenues, and gains normally have ___________.

A

Credit balances

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4
Q

What indicates how the account is increased in a journal entry?

A

The normal balance

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5
Q

What goes on each side of a T account?

A

Debits = Left
Credits = Right

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6
Q

What abbreviations are used for debits and credits?

A

DR and CR

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7
Q

To record an INCREASE in cash, we need to:

A

Debit the amount

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8
Q

Assets, expenses, and losses are usually ______ balances.

A

Debit

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9
Q

Credits ________ assets and __________ liabilities.

A

Decreases; Increases

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10
Q

Credits are normally on the _______ side of a T account.

A

Right

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11
Q

Liability (A/P), S/H Equity, and Revenues/Gains are usually _______ balances.

A

Credit

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12
Q

Expenses and Dividends Declared normally have a ______ balance.

A

DR

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13
Q

T/F: Revenue accounts have a debit balance.

A

False - CR balance

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14
Q

Balance is carried from one period to another if the account is ___________.

A

Permanent

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15
Q

Balance is transferred out of a temporary account at the __________________ to a permanent account.

A

End of the Period

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16
Q

Assets, liability, and S/H Equity are examples of:

A

Permanent Accounts

17
Q

T/F: General journal summarizes info on each transaction.

A

False - detailed information but NOT a summary.

18
Q

Information for each ACCOUNT is summarized in the _____________.

A

General Ledger

19
Q

What are trial balances used to check?

A

If DR = CR

20
Q

Which account is NOT involved in adjusting entries?

A

Cash accounts

21
Q

When are adjusting entries made?

A

END of accounting period

22
Q

What are the two types of adjusting entries?

A

Accruals and Deferrals

23
Q

____________ required when revenue/expenses need to be recognized ________ cash is received/paid.

A

Accrual adjusting entry; BEFORE

24
Q

_________ adjusting entry is required when revenue/expenses need to be recorded _______ cash is received/paid.

A

Deferral adjusting entry; AFTER

25
Q

What is used to record reductions?

A

Contra-asset Account

26
Q

Contra-asset whose normal balance is CR.

A

Accumulated depreciation account

27
Q

What has full values of all company’s accounts receivable?

A

Carrying Amount

28
Q

___________ = Assets cost

A

Carrying Amount

29
Q

What are made at the END of the accounting period?

A

Closing Entries

30
Q

To reset an account’s balance to zero, we must use ________.

A

Closing Entries

31
Q

Revenue and Expense go into the ___________ account.

A

Income Summary

32
Q

Income Summary and Dividends Declared go into the _________ account.

A

Retained Earnings