Chapter 2: The Balance Sheet 

The three categories you find on the Balance Sheet are:

__________ is the money and loans that a business borrows from banks and must repay in the future.

__________ is raising money by selling shares to stockholders or investors.

A business will invest in __________ to benefit the company.

Companies must document all __________, which includes loans, purchases, sales, and returns.

A transaction or exchange must always include a(n) __________.

By having a designated dollar amount (ex: American dollar), you are following the __________.

__________ happen between a company and someone, like selling a product to a customer.

__________ involve utilizing assets to create another asset, like a product to sell to get cash.

The __________ is used to report the financial information of a company.

A(n) __________ is an activity that occurs between at least two people.

The order of the accounting cycle is:

When a transaction has two effects on the accounting equation, this is called __________.

Assets, liabilities, and stockholders' equity all have a variety of __________.

Ledger accounts, aka __________ summarize information from the journal entries.

The __________ is used when making journal entries, which shows how transactions effect accounts. Where you write the total depends on if the account has a normal credit or debit balance.

The __________ of an account is the side that makes the account increase.

An has a normal __________ balance.

Liabilities and Stockholders' Equity have a normal __________ balance.

A journal entry includes:

__________ are created to record financial effects and can have multiple entries listed by the date transactions occurred.

After journal entries, a __________ is created to total up debits and credits of all accounts and to make sure debits = credits.

After creating a trial balance sheet, the __________ is created.

__________, also known as short term assets, will be used or sold within a year.

__________, also known as long term assets, will not be used or sold within the year.

__________, also known as short term liabilities, will be due and repaid within one year.

__________, also known as long term liabilities, will be paid after a year or more.

The __________ provides information on a company's ability to pay. You want more assets than liabilities.

Equation to calculate the Current Ratio:

When the current ratio is __________, that indicates a better ability to pay.

The process of recording and reporting transactions has an effect on:

When first recorded, assets and liabilities are recorded at initial cost, which follows the __________.