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Flashcards in Chapter 3 Deck (16):
1

The accounting equation

must always balance

2

Revenue does what to stockholder's equity?

increases it

3

Expenses do what to stockholder's equity ?

decreases it

4

Revenue accounts normally show what balance?

credit balances

5

Expense accounts normally show what balance?

debit balance

6

What contributions does the journal make to the recording process?

-it discloses in one place the complete effect of a transaction

-it provides a chronological record of transactions


-its helps to prevent or locate error

7

Account

an individual accounting record of increases and decreases in specific asset,liability, stock holder's equity, revenue or expense items

8

Accounting information system

the system of collecting and processing transaction data and communicating financial information to decision makers

9

Accounting Transactions

Events that require recording in the financial statements because they affect assets, liabilities, or stockholder's equity

10

Credit

the right side of an account

11

Debit

the left side of an account

12

Double-entry system

A system that records the two-sided effect of each transaction in appropriate accounts

13

General Journal

the most basic form of journal

14

General ledger

-a ledger that contains all asset liability, stockholder's equity, revenue, and expense accounts

15

Journal

An accounting record in which transactions are initially recorded in chronological order

16

Journalizing

The procedure of entering transaction data in the journal