Basic Accounting Terms 12 – Chapter 2
This chapter 2 includes introduction to accounting, basic accounting terms 4, double entry accounting, chart of accounts.
accounts
the basic summary device of accounting; the detailed record of all the changes in a specific asset, liability, or stockholder’s equity item as a result of transactions
chart of accounts
a list of all the accounts of a business and the numbers assigned to those accounts
double entry accounting
the rule of accounting that specifies every transaction involves at least two accounts and is recorded with equal amounts of debits and credits
left side of any account
right side of any account
t-account
an informal account form used to summarize transactions where the top of the T holds the account title and the base divides the debit and credit sides of the account
normal balance
the balance that appears on the side of an account where increases are recorded; the expected balance of an account
the chronological accounting record of the transactions of a business
record/journalizing
entering in a journal
transaction
an event that has a financial impact on a business entity
the accounting record summarizing, in accounts, the transactions of a business and showing the resulting ending account balances
posting
copying information from the general journal to accounts in the general ledger
posting reference
a notation in the journal and ledger that links these two accounting records together
trial balance
a list of all the accounts of a business and their balances; its purpose is to verify that total debits equal total credits
accounting period
the time period reflected by a set of financial statements
accounting cycle
the sequence of steps used to record and report business transactions
double entry accounting
the rule of accounting that specifies every transaction involves at least two accounts and is recorded with equal amounts of debits and credits
general ledger
the accounting record summarizing, in accounts, the transactions of a business and showing the resulting ending account balances