A detailed record of all increases and decreases that have occurred in an individual asset, liability, or equity during a specific period.
(Asset) A written promise that a customer will pay a fixed amount of money and interest by a certain date in the future. usually more formal than an Accounts Receivable.
(Asset) A payment of an expense in advance. It is considered an asset because the prepayment provides a benefit in the future. Examples of prepaid expenses are Prepaid Rent, Prepaid Insurance, and Office Supplies.
(Liability) A written promise made by the business to pay a debt, usually involving interest, in the future.
An amount owed but not paid. A specific type of payable such as Taxes Payable, Rent Payable, and Salaries Payable.
(Liability) Occurs when a company receives cash from a customer but has not provided the product or service. The promise to provide services or deliver goods in the future.
(Equity) Represents the net contributions of the stockholders in the business. Increases equity.
(Equity) Distributions of cash or other assets to the stockholders. Decreases equity.
(Equity) Earnings that result from delivering goods or services to customers. Increases equity. Examples include Service Revenue and Rent revenue.
(Equity) The cost of selling goods or services. Decreases equity. Examples include Rent Expense, Salaries Expense, and Utilities Expense.
Chart of Accounts
A list of all of a company's accounts with their account numbers.
A system of accounting in which every transaction affects at least two accounts.
The record holding all the accounts of a business, the changes in those accounts, and their balances.
A summary device that is shaped like a capital T with debits posted on the left side of the vertical line and credits on the right side of the vertical line.
(DR) The left side of a T-account
(CR) The right side of a T-account
The balance that appears on the increase side of an account.
Provides the evidence and data for accounting transactions.
A record of transactions in date order.
Transferring data from the journal to the ledger.
Compound Journal Entry
A journal entry that is characterized by having multiple debits and/or multiple credits.
A list of all ledger accounts with their balances at a point in time.
Shows the proportion of assets financed with debt.
(Debt Ratio = Total liabilities/ Total assets)