Quiz 2: Analyzing for Business Transactions

Journal

The ratio of total liabilities to total assets; used to reflect the risk associated with the company's debts.

Debit

The difference between total debits and total credits for an account including the beginning balance.

Debt ratio

A chronological record of each transaction in one place that shows debits and credits for each transaction.

Account

A written promise from a customer to pay a definite sum of money on a specified future date.

Unearned revenues

A simple form used as a helpful tool in understanding the effect of transactions and events on specific accounts.

Chart of accounts

A column in journals where individual account numbers are entered when entries are posted to ledger accounts.

Cash

equity

Prepaid Insurance

liability

Office Furnitur

revenue