Processing Business Transactions

These flashcards cover the key vocabulary and concepts related to processing business transactions in accounting, focusing on double entry accounting and journal entry procedures.

Double Entry Accounting

A system of accounting in which every transaction affects at least two accounts, maintaining a balanced equation.

General Journal

A chronological record of all business transactions where entries are first recorded before being posted to the general ledger.

T Accounts

A visual representation of individual accounts to track debits and credits in the accounting process.

Debit

An entry on the left side of an account, representing an increase in assets or a decrease in liabilities.

Credit

An entry on the right side of an account, representing a decrease in assets or an increase in liabilities.

Owner Capital

The equity invested in the business by its owner, representing ownership interest.

Posting

The process of transferring journal entry information to the general ledger accounts.

Balanced Equation

The condition in accounting where the total assets equal the total liabilities plus owner’s equity.

Cash Infusion

The process of injecting cash into a business to support its operations or growth.

Equity

The value of an owner's interest in a business, calculated as assets minus liabilities.