Chapter One Accounting In Action

Credit – Amount recorded on the right side
subsidiary ledger – a listing of individual accounts and amounts with a common characteristic
rent revenue – Money received for rent.
prepaid expenses – Expenses paid in cash and recorded as assets before they are used or consumed.
The amount remaining after the value of all liabilities is subtracted from the value of all assets – owners equity
general ledger – a ledger that contains all asset, liability, stockholders' equity, revenue, and expense accounts
_____ is a group process by which individuals produce solutions to problems without any restriction placed on their possible options.
Revenue Expenditure – Items that will benefit the firm for the current year and are classified as expenses. They are recurring costs incurred to earn revenue and will affect the current year's profit calculation. These are exported in the Income Statement.
Remuneration – 'A' of business income
4th step of analyzing transactions – does the equation remain in balance?
Financial Statements – Financial reports that summarize the financial conditions and operations of a business
maker – an individual who promises to pay on a promissory not' an individual who signs a promissory note
Closing Entry – Transfers balances in temporary accounts to Retained earnings and established zero balances in temporary accounts
_____ is а grоup prоcess by which individuаls prоduce solutions to problems without аny restriction placed on their possible options.
Assets – Things of value owned by an individual. Future economics benefits (FEB) controlled by the business as a result of past transactions, e.g. buildings, land, furniture, cars, inventory, cash at bank (Past transaction – Present control – Future economic benefits)
What is the earned capital held for future use in the business called? – Retained Earnings
Cash Short – A petty cash on hand amount that is less than a recorded amount.
BALANCE SHEET – which financial statement is DIVIDENDS PAYABLE usually found

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