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Concept explainers
Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter.
Event
External event
Internal event
Transaction
Source document
Account
Chart of accounts
General ledger
Debit
Credit
Double-entry system
Journal
Posting
Journalizing
General journal
- A numerical list of all accounts used by a company.
- A list of each account and its balance; used to prove equality of debits and credits.
- A happening of consequence to an entity.
- An entry on the right side of an account.
- An event occurring entirely within an entity.
- A piece of paper that is used as evidence to record a transaction.
- The act of recording
journal entries. - An entry on the left side of an account.
- The process of transferring amounts from a journal to the ledger accounts.
- An event involving interaction between an entity and its environment.
- A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders’ equity.
- A book, a file, a hard drive, or another device containing all of the accounts.
- A chronological record of transactions.
- Any event that is recognized in a set of financial statements.
- The journal used in place of a specialized journal.
- A system of accounting in which every transaction is recorded with equal debits and credits and the
accounting equation is kept in balance.
![Check Mark](/static/check-mark.png)
Concept Introduction:
Accounting is art of recording, classifying and summarizing the business transaction or business event it also communicates or interpretation the result to the users of accounting.
Journal entries are the part of basic accounting or primary accounting. In journal entries there are 2 aspects one is debit and another is credit. These 2 aspects are always equal. Journal entries are base for the ledger and trial balance.
To Identify: Fill in the blanks with appropriate headings.
Explanation of Solution
1. A numerical list of all the accounts used by the company. | It is termed as the ledger. |
2. A list of accounts and its balances used to prove equality of debit and credit. | It is termed as the Trial balance. |
3. A happening of consequence to an entity. | It is termed as the Event. |
4. An entry on the right side of an account. | It is termed as the Credit. |
5. An event occurring entirely within an entity. | It is termed as Internal Event. |
6. A piece of paper that is used as evidence to record a transaction. | It is termed as Source document. |
7. The act of recording the journal entry. | It is termed as journalizing. |
8. An entry on the left side of an account. | It is termed as Debit. |
9. The process of transferring the amounts from a journal to the ledger accounts. | It is termed as posting. |
10. An event involving interaction between an entity and its environment. | It is termed as external event. |
11. A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders’ equity. | It is termed as general ledger. |
12. A book, a file, a hard drive, or another device containing all of the accounts. | It is termed as Account. |
13. A chronological record of transaction. | It is termed as Journal. |
14. Any event that is recognized in a set of financial statements. | It is termed as Transactions. |
15. The journal used in place of a specialized journal. | It is termed as General Journal. |
16. A system of accounting in which every transaction is recorded with equal debits and credits and the accounting equation is kept in balance. | It is termed as Double entry System. |
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Chapter 3 Solutions
Financial Accounting: The Impact on Decision Makers
- A company can sell all the units it can produce of either Product X or Product Y but not both. Product X has a unit contribution margin of $18 and takes four machine hours to make, while Product Y has a unit contribution margin of $25 and takes five machine hours to make. If there are 6,000 machine hours available to manufacture a product, income will be: A. $6,000 more if Product X is made B. $6,000 less if Product Y is made C. $6,000 less if Product X is made D. the same if either product is made. Need answerarrow_forwardWhat is the yield to maturity of the bond on these financial accounting question?arrow_forwardGeneral accountingarrow_forward
- Morgan & Co. is currently an all-equity firm with 100,000 shares of stock outstanding at a market price of $30 per share. The company's earnings before interest and taxes are $120,000. Morgan & Co. has decided to add leverage to its financial operations by issuing $750,000 of debt at an 8% interest rate. This $750,000 will be used to repurchase shares of stock. You own 2,500 shares of Morgan & Co. stock. You also loan out funds at an 8% interest rate. How many of your shares of stock in Morgan & Co. must you sell to offset the leverage that the firm is assuming? Assume that you loan out all of the funds you receive from the sale of your stock.arrow_forwardSolve this financial accounting problemarrow_forwardFinancial Accountingarrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
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