Accounting Chapter 2 Flashcards

Study Notes

Key Accounting Terms and Definitions

Accounts: Detailed records tracking changes in specific assets, liabilities, or stockholder's equity resulting from transactions.
Chart of Accounts: A comprehensive list of all business accounts along with assigned numbers.
Double Entry Accounting: Fundamental principle stating that every transaction affects at least two accounts, maintained through equal debits and credits.
Debit: Represents the left side of an account, indicating increases in assets or expenses.
Credit: Corresponds to the right side of an account, showing increases in liabilities, equity, or revenue.
T-Account: Informal account structure summarizing transactions, featuring a title at the top and separate sides for debits and credits.
Normal Balance: The typical position of an account (debit or credit) where increases are recorded, reflecting its expected balance.
General Journal: Chronological record of all transactions for a business, serving as the initial point of entry.
Record/Journalizing: Process of entering transactions into the journal.
Transaction: Any event that has a financial impact on a business entity, affecting its financial statements.
General Ledger: Aggregate account record summarizing all transactions and showing ending balances for each account.
Posting: The act of transferring journal entries to the respective accounts in the general ledger.
Posting Reference: A notation that links journal entries with corresponding ledger accounts for tracking.
Trial Balance: A summary listing of all accounts and their balances to verify that total debits equal total credits.
Accounting Period: The specific time frame represented by a set of financial statements, crucial for understanding performance over time.
Accounting Cycle: The systematic sequence of steps taken to record, classify, and report business transactions, ensuring accurate financial reporting.

Description

Test your knowledge of key accounting terms with these flashcards covering Chapter 2. This quiz includes definitions for fundamental concepts like accounts, chart of accounts, and double entry accounting. Perfect for students wanting to reinforce their understanding of accounting principles.