Exam (elaborations)
NJ CALA FInance
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Exam of 2 pages for the course CALA NJ at CALA NJ (NJ CALA FInance)
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NJ CALA FInanceCash Basis Accounting - correct answer-Keeping records that shows only income actually
received during a fiscal period and only expenses paid during a fiscal year.
*Record income when cash or check is received
*Record expense when check is written
Accrual Basis Accounting - correct answer-Keeping records that show all income earned
during a fiscal period even though it isn't received yet and all expenses incurred during a
fiscal period even though the expenses are not yet paid
*Record income when a bill is written
*Record expense when an order is placed
Double Entry Accounting - correct answer-Recording of a debit and credit for each
transaction
**Debits must always equal credits**
Debits - correct answer-An entry made on the left side of the account
Credits - correct answer-An entry made on the right side of the account
Journals - correct answer-The organization's "books" where transactions are first recorded
before posting to the general ledger.
5 types of journals:
-Cash receipt journal
-Cash disbursement journal
-Account receivable journal
-Account payable journal
-General journal (recording transactions that don't fit in to the above 4 categories)
Posting - correct answer-The actual transcription of information from the journal into the
general ledger.
General Ledger - correct answer-Recording summary of all transactions posted from each
journal. The general ledger maintains a separate record for each acct as listed in the chart of
accounts.
Chart of Accounts - correct answer-A systematic arrangement or listing of all general ledger
accts by category with corresponding general ledger acct numbers. Assets are listed first,
followed by liabilities, equity, revenue, and expense accts.
Trial Balance - correct answer-Summary of balances from each acct in the chart of accts.
These balances are the numbers from which you generate your balance sheet as well as
your profit and loss statement.
Balance Sheet - correct answer-A financial report that reflects what a business:
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