Match the appropriate letter for the key term or concept to each definition provided (items 1-15). Note that not all key terms and concepts will be used.
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a. Balance sheet equation
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l. Debit
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b. Transactions
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m. Credit
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c. On account
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n. Entry
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d. Accrued (or accrual)
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o. Balance
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e. Journal
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p. Charge
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f. Post (posting)
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q. Journal entry
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g. Ledger
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r. Source document
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h. Account
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s. Adjusting journal entry
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i. Chart of accounts
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t. Closing the books
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j. T-account
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u. Transaction analysis methodology
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k. Account balance
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1. The process of answering five questions to ensure that a transaction is understood. The questions are:
(1) What's going on?
(2) What accounts are affected?
(3) How are they affected?
(4) Does the balance sheet balance? (Do the debits equal the credits?)
(5) Does my analysis make sense?
2. The left side of an account; an increase in asset and expense accounts or a decrease in liability, owners' equity, and revenue accounts.
3. Economic interchanges between entities that are accounted for and reflected in financial statements.
4. A chronological record of transactions.
5. A journal entry usually made during the process of closing the books that results in more accurate financial statements.
6. Assets = Liabilities = Owners' Equity (A = L + OE) expresses the fundamental structure of the balance sheet and is the basis of bookkeeping procedures.
7. Used to describe a purchase or sale for which cash will be paid or received at a later date. A "credit" transaction.
8. The process of recording a transaction in the respective ledger accounts using a journal entry as the source of information recorded.
9. A record of transactions arranged by account name.
10. The arithmetic sum of the additions and subtractions to an account through a given date.
11. An index of the accounts contained in a ledger.
12. The right side of an account; a decrease in asset and expense accounts or an increase in liability, owners' equity, and revenue accounts.
13. Evidence of a transaction that supports the journal entry recording the transaction.
14. The process of posting transactions and adjustments to the ledger and preparing the financial statements.
15. Recognition that an amount has been earned (or is owed) but has not been received (or paid).