Question

Chapter 2 LO 1, 2, 3, 4, 5 S2-16. (Learning Objectives 1, 2, 3, 4, 5: Define accounting terms) Accounting has its own! vocabulary and basic relationships. Match the accounting terms at the left with the correspond ing definition or meaning at the right. 1. Posting A. The cost of operating a business; a decrease in stock 2. Expense holders' equity B. Always an asset 3. Debit C. Side of an account where increases are recorded 4. Trial balance D. Lists a company's accounts and account numbers (no 5. Equity account balances in this item) 6. Net income E. Copying data from the journal to the ledger 7. Receivable F. Assets - Liabilities 8. Chart of accounts G. Revenues - Expenses 9. Payable H. Lists all accounts with their balances 10. Journal I. Always a liability 11. Normal balance J. Record of transactions 12. Ledger K. Left side of an account L. The book of accounts and their balances

Answer 1

		Supporting comments
1. Posting	E. Copying data from the journal to the ledger	After journal entries are prepared, each journal entry is posted to respective ledger accounts with a debit and credit.
2. Expense	A. The cost of operating a business; a decrease in stockholders' Equity	Expenses are incurred in the ordinary course in order operate the business.
3. Debit	K. Left side of an account	A ledger account or an account will have debit on left side of the account and credit on the right side of the account.
4. Trial Balance	H. Lists all accounts with their balances	A trial balance shows all accounts with the final balances before preparing the financial statements.
5. Equity	F. Assets - Liabilities	Accounting equation states that equity is the result by deducting the total liabilities from the total assets.
6. Net Income	G. Revenues - Expenses	Net income is calculated by preparing the income statement which states that all the expenses are deducted from the total revenues in order to know the net income.
7. Receivable	B. Always an asset	Receivable is one of the type of current asset under assets and which are reported in the balance sheet.
8. Chart of accounts	L. The book of accounts and their balances	The chart of accounts shows all the accounts and its balances for a particular period.
9. Payable	I. Always a liability	Payable is one of the type of current liability under liabilities and which are reported in the balance sheet.
10. Journal	J. Record of transactions	Each transaction is recorded in the book of accounts through Journals based on the double accounting system.
11. Normal Balance	C. Side of an account where increases are recorded	For every account whether asset or liability or revenue or expense, each account will have normal balance.
12. Ledger	D. Lists a company's accounts and account numbers (no account balances in this item)	Each account head will have respective ledger account which contains all transactions' balance happened in respective account.