Accounting Terms Chapter 1 Accounting- Information and measurement system that identifies records and communicates relevant information about a company’s business activities Accounting equation- equality involving a company’s assets liabilities and equity, assets equal liability plus equity/ aka balance sheet equation Assets- resources a business owns or controls that are expected to provide current and future benefits to the business Auditors- An individual who checks the accuracy, fairness
Words: 2015 - Pages: 9
in a journal, (c) transfer the journal information to the appropriate accounts in the ledger. 5. Explain what a journal is and how it helps in the recording process. The initial accounting record of a transaction is entered in a journal before the data are entered in the accounts. A journal (a) discloses in one place the complete effect of a transaction, (b) provides a chronological record of transactions, and (c) prevents or locates errors because the debit and credit amounts for each entry can
Words: 3387 - Pages: 14
00 | 29,750.40 | 4958.45 | 312,331.33 | 12/31/2008 | 36,000.00 | 27,046.80 | 4507.85 | 307,823.48 | 12/31/2009 | 36,000.00 | 24,588.00 | 4098.04 | 303,725.44 | 12/31/2010 | 36,000.00 | 22,352.40 | 3725.44 | 300,000.00 | | | | | | Journal entries Purchase of Bond 1/1/2006 Purchase of 12% Bond 300,000.00 Loss on purchase of bond 22,744.44 Cash 322,744.44 To record interest and bond premium amortization 12/31/2006 Interest revenue 30,545.34 Bond premium
Words: 808 - Pages: 4
The Accounting Cycle and Accrual Accounting Concepts Accounting Information System | Journal, Ledger Accounts, and Trial Balance | Cash-Basis Versus Accrual-Basis Accounting | Accrual Accounting Concepts | Adjusting Entries, Adjusted Trial Balance, and Closing | Self-Assessment After learning about the income statement and the balance sheet in Chapters 1 and 2, we are now being introduced to the accounting cycle and certain underlying accounting concepts that influence the contents of those two
Words: 3427 - Pages: 14
Journalize the Transactions f. Post to Ledger Accounts g. Prepare a Unadjusted Trial Balance h. Journalize and Post Adjusting Entries i. Prepare an Adjusted Trial Balance j. Prepare Financial Statement k. Journalize and Post Closing Entries l. Post-Closing Trial Balance m. Optional Reversing Entries IV. Conclusion While not having an accounting cycle for the business can possibility hurt the company, following the accounting process and
Words: 834 - Pages: 4
provide information for decision-making. Double-entry system Accountant to record the dual effects of each transaction uses double-entry system. As every transaction affects two items it is necessary to show these effects when recording each transaction. This stage is known as bookkeeping and the process is called double entry. Particular method follows the rule of accounting equation and maintains that every debit has a corresponding credit entry. Source documents Source documents are the original
Words: 563 - Pages: 3
cost of $12,000. It had been depreciated in the last 5 years on the straight-line method with 8 years of life and no salvage value. On January 1, 2014, Sally sold the truck to its parent, Paulson Company for $5,280. Prepare the working paper entry (in journal entry format) for the intercompany sale for Paulson Company and subsidiary for the years ended December 31, 2014 and 2015. 3. Peng Corporation (the parent) during the year ended December 31, 2015, sold merchandise to Skyline Company (a 75%-owned
Words: 282 - Pages: 2
1. (TCO 3) At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required (10 points) and (2) provide an example of the closing of an expense account, Salary Expense in the form of a journal entry. (10 points) (Points : 20) It’s basically all about bringin the account back to zero. It is necessary to close provisional financial records at the end of the financial report because when they are closed its of course back to zero, for instance;
Words: 286 - Pages: 2
7 Stephen purchased office supplies for $800 in cash. This transaction would • Question 8 To debit an account is to enter an amount on the left column in the journal entry. • Question 9 Prepaid Insurance is an expense account. • Question 10 Mary's business has performed services on account. The journal entry to record this transaction would include a debit to Cash and a credit to Service Revenue. • Question 11 The normal balance of the Owner, Capital account •
Words: 798 - Pages: 4
Accounting for a Merchandising Business In this lesson, we examine the accounting for merchandising operations -- those that sell products. The products held for sale are called inventory, or more specifically, merchandise inventory. Inventory is a current asset that will be sold to yield a profit--and the adage "buy low, sell high" is a succinct way to state a merchandiser's profit strategy. In addition to introducing a new asset, we also introduces a new cost category, and a new name for the
Words: 1697 - Pages: 7
