Flashcards in Chapter 3 Deck (16):
The accounting equation
must always balance
Revenue does what to stockholder's equity?
Expenses do what to stockholder's equity ?
Revenue accounts normally show what balance?
Expense accounts normally show what balance?
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
an individual accounting record of increases and decreases in specific asset,liability, stock holder's equity, revenue or expense items
Accounting information system
the system of collecting and processing transaction data and communicating financial information to decision makers
Events that require recording in the financial statements because they affect assets, liabilities, or stockholder's equity
the right side of an account
the left side of an account
A system that records the two-sided effect of each transaction in appropriate accounts
the most basic form of journal
-a ledger that contains all asset liability, stockholder's equity, revenue, and expense accounts
An accounting record in which transactions are initially recorded in chronological order