Flashcards: Fundamentals of Financial Accounting — 10 cards

Normal account balance — definition?

The side (debit or credit) that increases an account.

Normal balance — definition?

Side that increases account amount.

Expanded accounting equation — includes?

Assets = Liabilities + Common Stock + Retained Earnings.

Asset accounts — normal balance?

Debit.

Credit balance criteria — accounts?

Liabilities, equity, and revenues normally have credit balances.

Liability, equity — normal balance?

Credit.

Overdrawn bank balance — sign?

Credit balance in cash account.

Expanded accounting equation?

Assets = Liabilities + Equity + Retained Earnings.

Retained earnings — definition?

Accumulated net income minus dividends.

Debit increase — accounts?

Assets and expenses.