Unit 2 Flashcards
short-term notes payable
notes to creditors that will be paid back within 1 year (interest included)
long-term notes payable
notes to creditors that will be paid back in more than 1 year (interest included)
accounts where Increase = Debit
Assets, Expenses, Dividends
accounts where Increase = Credit
Revenue, Liability, Equity
T-accounts
used to show increase/decrease of an account; left debit, right credit;
account balance
add debits and credits depending if they are increases/decreases. If balance a debit write “Balance” to left of balance. If balance a credit write “Balance” to right of balance
normal balance
he side of the T-account where increases occur. Example the normal balance for an asset account is on the debit side.
Chart of Accounts
A list where accounts are named with their account number.
Numbers on left, names on right.
trial balance
an internal document that lists the balances of all accounts at a given time. Debits must equal credits. Information from trial balance used to make financial statements
Accounts
A collection of detailed information regarding the increases/decreases of an asset/liability/equity
Equity
Retained earnings + share capital
Or Net assets (assets-liabilities)
Accounts receivable
Product or service sold on account
Merchandise Inventory
All product to be sold in the future
Accounts payable
Debts for services/products used in day to day operations
Unearned revenue
Revenue earned with service or produce provided.
