Financial Accounting Chapter 1-4 Rutgers-Wasserman Exam with accurate detailed answer

Financial Accounting Chapter 1-4 Rutgers- || || || ||




Wasserman Exam with accurate detailed || || || || ||




answer


Account - ✔✔individual accounting record of increases and decreases in a specific asset, liability,
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or stockholder equity item
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Debit - ✔✔left side of account, debit balance shows if account debit amounts total more than
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credits


Credit - ✔✔right side of account, credit balance shows if account credit amounts total more than
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debits


Cash - ✔✔increase in cash= debit
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decrease in cash= credit || || ||




Liabilities - ✔✔increase= credit || || ||




decrease= debit ||




L


Stockholder's Equity - ✔✔common stock: || || || || ||




increase= credit ||




decrease= debit ||




Retained Earnings - ✔✔increase= credit || || || ||




decrease= debit ||




RE

, Dividends - ✔✔increase= debit || || ||




decrease= credit ||




D


Revenues - ✔✔increase= credit || || ||




decrease= debit ||




R


Expenses - ✔✔increase= debit || || ||




decrease= credit ||




E


3 basic recording process steps - ✔✔1. analyze transaction for effects on accounts
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2. enter transaction into journal
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3. transfer journal info to appropriate accounts in the ledger
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Journal - ✔✔"book of original entry", shows debit and credit effects on specific accounts, two
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amount columns, date, account title/explanations
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Journal Contributions - ✔✔1. discloses in one place the complete effects of a transaction
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2. provides a chronological record of transactions
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3. helps to prevent or locate errors due to ease of debit/credit comparison
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Journalizing - ✔✔companies make separate journal entries for each transaction
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Complete Journal Entry - ✔✔1. date of transaction
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