The Accounting Equation forms the foundation of the balance sheet and illustrates how assets, liabilities, and equity are interrelated, ensuring that the balance sheet remains balanced.
Carried Down (C/D) is an accounting term used to indicate that the total balance from the previous page of a ledger is carried down to the top of the new page.
A compensating error is an accounting error that is balanced out by another error, making the errors cancel each other out so that the trial balance does not reveal the mistake.
Contra accounts are used in financial accounting to offset balances between accounts, often simplifying the settlement process and providing clearer financial statements.
A term used in accounting to indicate an entry made on the right-hand side of an account ledger, typically representing a decrease in assets or an increase in liabilities and equity.
Double-entry accounting, also known as double-entry bookkeeping, is a system of financial records used in business whereby equal debits and credits are recorded for each transaction, ensuring the accounting equation (Assets = Liabilities + Owner's Equity) remains balanced.
In accounting, to journalize means to record financial transactions in a journal, such as the general journal, as a part of the accounting process.
The Purchases Account is used to record transactions involving the acquisition of goods either on credit or for cash. It plays a critical role in managing a company's inventory and financial records.
A visual representation used in accounting to represent individual accounts where debits and credits are recorded. Resembling the capital letter 'T', it simplifies the tracing of transactions and helps ensure accurate bookkeeping.
