Cash Sales vs. Credit Sales

Flashcards covering key vocabulary related to cash and credit sales, ledger balancing, and accounting principles.

Cash Sale

A transaction where payment is made immediately at the time of purchase.

Credit Sale

A transaction where payment is deferred to a later date and reflected as a receivable.

Debits

Entries that increase assets or decrease liabilities in double-entry accounting.

Credits

Entries that decrease assets or increase liabilities in double-entry accounting.

Receivables

Amounts owed to a company by its customers for sales made on credit.

Balance Carried Down (c/d)

The remaining balance in an account that is carried over to the next accounting period.

Balance Brought Down (b/d)

The opening balance in an account for the new accounting period.

T Accounts

Visual representations of individual accounts within a company's general ledger.

Profit and Loss Account

An account that summarizes revenue and expenses for a specific period, showing profitability.

Statement of Financial Position

A financial statement that lists a company's assets, liabilities, and equity at a specific point in time.