Lesson #4- Glossary
Account An account is an individual accounting record of increases and decreases in a specific asset, liability, or owner’s equity item.
Debits and Credits The term debit means left and the term credit means right. Entering an amount on the left side of an account is called debiting the account and entering an amount on the right side of an account is called crediting the account.
Double-Entry Accounting , each transaction must affect two or more accounts to keep the accounting equation in balance. This is known as the double-entry accounting system.
The general journal Discloses in one place the complete effect of a transaction. Provides a chronological record of transactions, Helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared.
The General Ledger The general ledger is the entire group of accounts maintained by a company, including all assets, liabilities, equity, revenues and expenses.
Posting / Chart of Accounts Posting is the procedure of transferring journal entries to the ledger accounts. Posting accumulates the effects of journalized transactions in the individual accounts
Trial Balance A trial balance is a list of accounts in the ledger and their balances at a specific time.