PART 2- FILL IN THE BLANKS Please use the answer sheet provided for your answers to this section. Use each of the following terms once in completing the following statements. 1. 1234 income statement sales journalizing gross profit credit trial balance owner's equity fees earned closing entries current liabilities current assets expenses debit solvency fixed assets chart of accounts accounts receivable on account liquidity prepaid drawings transaction accounts payable bank debit memo is the difference between assets and liabilities. Amounts owing to other people or businesses are called A business. 5. are anything that a business owns. balance sheet posting reference general journal assets liabilities merchandise is a statement showing the financial condition of a person or is the ability to convert assets quickly into cash. 6. Document sent by the bank indicating that money has been withdrawn from a customer's account. 7. Amounts owing to a business by customers are called 8. Debts of a business are classified as 9. A 10. The right side of an account is referred to as the is a listing of all account balances to see if total debits equal total credits. side in accounting. side in accounting. 11. Goods bought by a business for resale to customers. 12. The left side of an account is referred to as the 13. A is a business event that affects two or more accounts in the ledger. 14. An amount withdrawn by the owner of a business for his/her personal use is called 15. The are formally recorded. 16. A 17. is also called the book of original entry where accounting transactions is a list of accounts used by a business. 18. When goods and services are bought, 19. The initials PR stand for 20. 222 21. posted to or has come from. 22. The is a word that refers to the process of recording transactions in a journal. they are not paid for immediately. and indicate where an accounting entry has been is a revenue account of a merchandising business. is a revenue account of a service business. is a financial statement showing the results of the operations of a business over a particular period of time. 23. Costs incurred by a business for daily operations are called 24. Debts that will be paid in less than a year are classified as 25. Assets that can be converted into cash within one year are referred to as 26. 27. are assets that will benefit a company for longer than one year. are done to zero off certain account balances at the end of a time period. 28. Expenses that will benefit more than one time period are called. 29. Sales minus Cost of Goods Sold is equal to 30. The ability for a company to pay it's debts on time is a measure of it's