Exam 2 Terms

Exam 2 Terms - Account A place or means of summarizing all...

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Account – A place or means of summarizing all of the transactions that affect a particular asset, liability, equity, revenue, expense, gain, or lose item. Adjusting Entry – At the end of an accounting period, record the transactions which are in process or have been completed but not yet recorded. These entries are necessary in order to record revenues when they are earned and expenses when they are incurred, and not necessarily when cash is received or paid. Closing Entry – The purpose of closing is to close or transfer the balances in the temporary accounts into retained earnings account. Credit – The term used to identify the right-hand side of an account. A credit increases a liability, equity, or revenue account and decreases an asset or expense account. Debit – The term used to describe the left-hand side of an account. A debit increases an asset, expense or dividend account and decreases a liability, equity, or revenue account. Double entry accounting – This method requires that for every transaction recorded, the total
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Exam 2 Terms - Account A place or means of summarizing all...

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