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accounting name
what goes at the top of a T account?
right
are credits entered on the left or right side of a T account?
left
are debits entered on the left or right side of a T account?
no it means left
does debit always mean increase?
no it means right
does credit always mean decrease?
yes
does every transaction have to have equal amounts of debits and credits?
balanced
the accounting equation has to be _________
ledgers
businesses group their accounts in _________
one must increase and one must decrease
how can a transaction affect two accounts on the same side of the accounting equation and still be balanced?
no limit
what is the account limit for a chart of accounts?
t account
a tool used to analyze a business transactions effect on an account
debit
the amount entered on the left side of an account
double entry accounting
requires a debit and a credit for each transaction
normal balance
the increase side of an account
credit
the amount entered on the right side of an account
chart of accounts
an official list of all of the accounts used by a business to record it transactions
decrease
expenses __________ owners equity
yes
are the rules for debit and credit for expense accounts the same as the rules for asset accounts?
easier to make better financial decisions and compare them
why should a business have seperate accounts for recording revenue and expenses?
debit
expenses are always _________
decreases
the withdrawal of cash by the owner of the business ___________ owners equity
yes
is it true that expenses have the opposite effect of revenue on the capital account?
the balance that they ended the previous cycle with
Permanent accounts start each accounting period with what kind of balance?
zero
temporary accounts start each accounting period with what kind of balance?
capital, assets, liabilities
list all permanent accounts:
revenue, expenses, drawing
list all temporary accounts:
credits
debits must always equal ___________
expenses
the cost of doing business/the cost of keeping the business in operation
temporary
the balance of this type of account does not carry forward from one period to the next
revenue
money a business earns from the sale of goods and services
permanent
the balance of this type of account is carried forward from one period to the next
withdrawal
this occurs when the owner takes assets out of the business for personal use