Acc 2 - Ch 7 Vocab

general ledger

a collection of specific asset, liability, and owners’ equity accounts.

transaction files

a journal in a computer-based transaction system.

master file

a ledger in a computer-based transaction system.

trial balance

a listing of all general ledger accounts and their respective balances to ensure that debits equal credits.

account

a place where the results of events affecting that item are recorded.

adjusted trial balance

a trial balance done after adjusting entries have been made and posted.

post-closing trial balance

a trial balance prepared after the closing entries have been posted.

contra account

an account with an opposite balance to the normal balance of its associated account.

revenue deferral

an adjusting entry that occurs when a company has been paid in advance for services to be performed in a future period.

expense deferral

an adjusting entry that occurs when a company uses previously purchased assets in an attempt to generate revenue in future periods.

expense accrual

an adjusting entry that occurs when expenses are incurred in one accounting period and payment is made in a later period.

revenue accrual

an adjusting entry that occurs when revenues are earned in one accounting period and payment is received in a later period.

permanent account

an asset, liability, or owners’ equity account whose balance is carried over from year to year.

closing entries

an entry made to close out a temporary account, transfer the balance to retained earnings, and determine income.

business event

an event that management wants to plan and evaluate.

t-accounts

an informal representation of a general ledger account.

adjusting entry

an internal entry made to adjust the accounts for internal events prior to preparing financial statements.

chart of accounts

an organizational scheme used to classify accounts as assets, liabilities, or owners’ equity.

general journal

the journal used to record both the account(s) to be debited and the account(s) to be credited.

debit

the left side of an account.

journalizing

the process of recording a journal entry.

posting

the process of recording the appropriate part of a journal entry to the affected account.

journal entry

the recorded effect of an accounting event.

credit

the right side of an account.

normal balance

the side of an account is always the side (debit or credit) on which it increases

accounting cycle

the time period between financial statements.