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ACG2001 Stack 1
ACG2001 - Financial Accounting 1 - IRSC
Term | Definition |
---|---|
Assets = | Liabilities + Owner's Equity |
With Assets debit... | Increases (assets) |
With Assets credit... | Decreases (assets) |
With Liabilities debit... | Decreases (liabilities) |
With Liabilities credit... | Increases (liabilities) |
With Owner's Equity debit... | Decreases (owner's equity) |
With Owner's Equity credit... | Increases (owner's equity) |
With Draws (like a withdraw) debit... | Increases (draws) |
With Draws (like a withdraw) credit... | Decreases (draws) |
With Revenue Accounts debit... | Decreases (revenue accounts) |
With Revenue Accounts credit... | Increases (revenue accounts) |
With Expenses debit... | Increases (expenses) |
With Expenses credit... | Decreases (expenses) |
How are expenses increased? | By debit |
Posting | the process of transferring the debit and credit information from the journal to individual accounts in the general ledger |
How are assets increased? | By debit |
How are liabilities increased? | By credit |
How is owner's equity increased? | By credit |
What is an owner's investment? | When the owner takes cash from a personal account and puts it towards their business account. |
What is unearned revenue? | Liability recorded when cash is received before providing a service. |
What does "on account" mean? | A line of credit that has been extended and the money will be paid later. |
What is an expense? | Money spent (usually to generate revenue) |
What are "supplies on hand"? | Assets that are actually tangible used to produce goods and services. |
What is an accounts receivable? | When one person does a job for someone and the customer says they will pay them at another time (the expected pay time) |
What is an accounts payable? | It is a liability for goods or services purchased on credit by a business owner who now owes their supplier. |
Sales (def.) | Selling things, ex food, goods |
Service Charges (def.) | Doing things, ex cutting grass, cleaning windows |
Business Transaction | An economic event that changes the entities financial condition. ex. selling a million donuts and make incredible revenue |
What is a liability? | Anything that is owed ex. a credit card |
What is an asset? | Resources owned by a business ex. Amazon's carrier trucks |
What is a transposition? | When the digits of a number are recorded in incorrect order ex. $576,000 recorded as $756,000 |
What is a slide? | When the decimal point in a number is recorded in the wrong place ex. $5.76 recorded as $57.6 |
What does a Double-Entry Accounting System entail? | 1.) Every business transaction must be recorded in at least two accounts and 2.) Total debits must equal total credits |