Debit Credit Review Questions Accounting 30S Debit Credit Review Questions

The balance in this type of account will be closed at the end of the accounting year so that the account will begin the following year with a zero balance

Income statement account Temporary account Or Nominal account Income statement account

assets = liabilities + owner’s equity

Accounting equation

Two of these records are involved in every business transaction

account

This general ledger account’s credit balance reports a retailer’s main operating revenues for the account year

Sales

This accounting method reports revenues when they are earned and expenses when they occur

Accrual method

The balance in this type of account will be carried forward from the end of an accounting year to the beginning of the next accounting year

Permanent Or Real or Balance Sheet

This internal report lists the balances in each of the general ledger account in either a debit or credit column for the purpose of showing that accounts have debits equal to credits

Trial balance

This type of liability account is expected to have a debit balance This type of liability account is expected to have a debit balance. An example is HST Recoverable

Contra liability

Accounting system that requires that every business transaction will involve two or more accounts and that the debit amounts will have the same total as the credit amounts

Double entry

This journal shows the account debited and the account credit and their amounts

General journal

In a manual system this is the recording of amounts from a journal into the general ledger

posting

This type of account is credited when an asset is sold for more than its book value

Gain (revenue)

The accounts that are debited when they are used up in the process of earning revenues

expense

The left side of an account and the normal balance for asset, expense and loss accounts

debit

Account debited when an asset is sold for less than its book value

loss

The accounts credited when they are earned through the sale of goods or services

revenue

Right side of an account and the normal balance for liability, equity, revenue and gain accounts

credit

Account debited when the owner withdraws business cash (or other assets) for person use. At the end of the accounting year, the balance is transferred to the owner’s capital account

Owner’s drawing

Journal entry to accrue or defer amounts prior to preparing a company’s financial statement

Adjusting entry

In manual accounting systems this is defined as the book of original entry

This type of entry has more than one account that is debited and/or more than one account that is credited.

Compound journal entry

This list of the general ledger accounts does not include the account balances

Chart of accounts

This includes both a debit amount and a credit amount that will be posted to the general ledger accounts

Journal entry

These entries transfer the end-of-the-year balances from the income statement accounts to the income summary account. These will result in the income statement accounts beginning each accounting year with a zero balance

Closing entries