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Account
A device for recording the changes (increases or decreases) in the fundamental accounting elements.
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Accounting
A language of business employed to communicate financial information based upon analyzing, recording, classification, summarization, reporting, and interpretation of financial data.
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Account Balance
The difference between the total debits and the total credits in an account.
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Accounts Receivable
An unwritten promise by a customer to pay, at a later date, for goods sold or services rendered.
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Assets
Property of monetary value owned by a business.
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Chart of Accounts
A list of all the account titles and the account numbers assigned to them.
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Classifying
The sorting of the many business transactions in an orderly and systematic manner; sorting or grouping like things together.
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Double Entry Accounting/Bookeeping
The process of recording equal debits and credits for a single business transaction.
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Fiscal Year
Any consecutive 12 months period.
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In Balance
A condition in which the totals of debits and the total of credits are equal in an account.
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Interpreting
Explaining the significant events or developments that occur, usually taking the form of analysis and compairisons
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Journal
A book of original entry.
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Journalizing
The process of recording business transaction in a Journal
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Net Profit ( Net Income)
The difference between gross profit and expenses when gross profit is larger.
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Net Loss
The difference between gross profit and expenses when the expenses are larger.
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Notes Payable
A written promise to pay a creditor a certain amount in the future.
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Posting
The transferal of data from the journal to the ledger
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Summarizing
Bringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements; bringing together various items of information to determine or explain a result.
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T-Account
A skeleton form of an account used for instructional purposes.
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Transaction
Any activity of a business enterprise that involves the exchange of values
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Trial Balance
A work paper proving the equality of the debit and credit balances in the ledger
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What is the abbreviation for debit and credit?
DR and CR
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What is included in a Trial Balance?
A list of all accounts showing the title and balance of each account. By totaling the debits and credits their equality can be tested.
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What is included in an Income Statement?
Reports net income or loss. Revenues-Expenses =Net Income or Loss
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What is included in a Balance Sheet?
Verifies balance of accounting equation. Assets=Liabilities + Owner's Equity
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What is included in the Statement of Owners Equity?
- Shows changes in the owner's capital account
- Beginning Capital + Investments + Net Income - Withdrawals = Ending Capital
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Debit and Credit side of Standard Account
- Left --> Debit
- Right--> Credit
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Numbers associated with account in Chart of Accounts?
- Assets (100-199)
- Liabilities (200-299)
- Owner's Equity (300-399)
- Revenues (400-499)
- Operating Expenses (500-599)
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What are the other names for Balance Sheet?
- 1. Statement of Financial Position
- 2. Statement of Financial Condition
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What are some examples of Temporary Owner's Equity Accounts?
Fundraiser? Anything that is a one time or temporary (short-term) source of money or revenue.
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