Chapter 2

Question 1

Difference between total debits and total credits (including the beginning balance) for an account.

Answer 1

Account balance

Question 2

Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.

Answer 2

Balance column account

Question 3

List of accounts used by a company; includes an identification number for each account.

Answer 3

Chart of accounts

Question 4

Recorded on the right side; an entry that decreases an asset or expense account, or increases a liability, revenue, or equity account; abbreviated Cr.

Answer 4

Credit

Question 5

Individuals or organizations entitled to receive payments.

Answer 5

Creditors

Question 6

Recorded on the left side; an entry that increases an asset or expense account, or decreases a liability, revenue, or equity account; abbreviated Dr.

Answer 6

Debit

Question 7

A ratio of total liabilities to total assets; used to reflect the risk associated with a company’s debts.

Answer 7

Debt ratio

Question 8

The process of recording transactions in a journal.

Answer 8

Journalizing

Question 9

The process of transferring journal entry information to the ledger; computerized systems automate this process.

Answer 9

Posting

Question 10

List of ledger accounts and their balances (either debit or credit) at a point in time; total debit balances equal total credit balances.

Answer 10

Trial balance