Chapter 3 Flashcards
1
Q
Accounting transactions
A
Economic events that require recording financial statements
2
Q
Accounting equation
A
A= L + S.E
3
Q
Main points of transactions
A
- be analyzed in terms of its effects on assets, liabilities, s.e
- the two sides must be equal
- each change in S.E must be indicated
4
Q
Account
A
an individual accounting record of increases and decreases in a specific asset, liability, stockholders equity, revenue, or expense item.
5
Q
T- account
A
title the account, left is debit, right is credit
6
Q
Debit
A
(Dr.)
7
Q
Credit
A
(Cr.)
8
Q
Assets, Expenses, Dividends
A
Increase= debit Decrease= credit
9
Q
Liability, Common Stock, Revenue, Retained earnings
A
Increase=Credit
Decrease= debit
10
Q
Accounting information System
A
System of collecting and processing transaction data and communicating financial info to decision makers.
11
Q
Double entry system
A
Equality of debts and credits
12
Q
Debit balance
A
Debits are greater than credits
13
Q
Credit Balance
A
Credits are greater than debits
