Chapter 3 Vocab

Account

An individual accounting record of increases and decreases in specific asset, liability, stockholders’ equity, revenue, or expense items.

Accounting information system

The system of collecting and processing transaction data and communicating financial information to decision-makers.

Accounting transactions

Events that require recording in the financial statements because they affect assets, liabilities, or stockholders’ equity.

Chart of accounts

A list of the names of a company’s accounts.

Credit

The right side of an account.

Debit

The left side of an account.

Double-entry system

A system that records the two-sided effect of each transaction in appropriate accounts.

General journal

The most basic form of journal.

General ledger

A ledger that contains all asset, liability, stockholders’ equity, revenue, and expense accounts.

Journal

An accounting record in which transactions are initially recorded in chronological order.

Journalizing

The procedure of entering transaction data in the journal.

Ledger

A record of all accounts maintained by a company and their amounts.

Posting

The procedure of transferring journal entry amounts to the ledger accounts.

Trial balance

A list of accounts and their balances at a given time.

T-account

The basic form of an account.