Accounting Unit 3 and 4

Accounting cycle

Accounting cycle

The set of accounting procedures performed in each fiscal period

Transposed

the name used to describe when the order of a numbers digits has been switched

Fiscal period

The date on an Income Statement is shown as a

Comp. entry

The type of entry when there are more than one debit and/or credit.

Jounal Page

The information that goes into the ledger PR Column.

Ledger #

The information that goes into the journa

Posting reference

"PR" is short for?

Chart of accounts

A list of all accounts used by a business is found here.

Posting

The process of transferring information from the General Journal to the General Ledger.

Indented

In the General Journal, the credit entry is distinguished from the debit entry because it is recorded second and_

Opening Entry

The name for the first journal entry to start-up the business.

Journalizing

the process of entering information into the journal

Debit

these entries are always recorded first in the journal

Book of original entry

Another name for the General Journal.

Chronological

The General Journal lists transactions in this order.

Revenue recognition

This IFRS rule states that revenue is recorded when cash is received or an invoice sent.

Income St

The financial statement that is prepared first, after the trial balance.

Inc capital

when that income is greater than drawings

Net loss

When revenue is less than expenses.

Net income

When revenue is greater than expenses

matching principal

This IFRS rule states that expenses should be recorded in the same fiscal period as a revenues they help generate

Expenses

Money spent in the routine operation of the business.

Revenue

Money earned from the sale of goods or services.

objectivity principal

This IFRS rule states that accounting records must be based on evidence and that evidence comes from source documents.

Goods and services

A business can sell these two things.

time period

This IFRS rule states that accounting must be measured over equal lengths of time.

Credit

Revenue accounts increase with this type of entry

Cash Sales slip

This source document provides details about a cash sale.

bank credit memo

This notice from the bank indicates that your bank account has been increased.

double entry accounting

The system of accounting when the total debit entry must equal the total of the credit entry.

Sales invoice

This source document is used for sales on account.

Debit

Expenses increase with this type of entry

Drawings

This account is used when the owner withdraws assets from the business

Purchase invoice

When recording a purchase on account you would use this Source document.

Bank debit memo

This notice from the bank indicates your bank account has been decreased

Who uses income statements

Owners and managers, bankers, income tax authorities

fiscal period

the period of time over which earnings are measured

The Accrual Basis of Accounting

Revenue should be recognized when it is earned. The job or service must be completed. Expenses are Recorded when incurred. It doesn’t matter if it is cash or credit transaction.

accounts numbering system

100-199 Asset Accounts

200-299 Liability Accounts

300-399 Owner’s Equity Accounts

400-499 Revenue Accounts

500-599 Expense Accounts