Chapter 3, Problem 3.1KTQ

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

Trial balance

1. A numerical list of all accounts used by a company.
2. A list of each account and its balance; used to prove equality of debits and credits.
3. A happening of consequence to an entity.
4. An entry on the right side of an account.
5. An event occurring entirely within an entity.
6. A piece of paper that is used as evidence to record a transaction.
7. The act of recording journal entries.
8. An entry on the left side of an account.
9. The process of transferring amounts from a journal to the ledger accounts.
10. An event involving interaction between an entity and its environment.
11. A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders’ equity.
12. A book, a file, a hard drive, or another device containing all of the accounts.
13. A chronological record of transactions.
14. Any event that is recognized in a set of financial statements.
15. The journal used in place of a specialized 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.

To determine

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.