St.

Augustine’s School
Iba, Zambales
S.Y. 2022 -2023

Financial Statements Intro Assessment

Directions: Read the definitions listed below and fill in the blank with the correct
vocabulary word listed in the Word Bank.

Accounting System Debit Credit

Transactions Double-Entry Accounting Journal Entry

Journals Accounting Process (or Special Journals

cycle)

General Journal Account Ledger

Posting General Ledger Subsidiary Ledgers

Master Account Control Account

1. Transcations Exchanges of goods or services between/among two or more entities or

some other event having an economic impact on a business enterprise.

2. Special Journals An accounting record used to list a particular type of frequently

recurring transaction.

3. Account. A record used to classify and summarize the effects of transactions.

4. Credit An entry on the right side of an account.

5.Business Record/Source Account A record used as the basis for analyzing and
recording transactions. Examples include invoices, check stubs, and receipts.

6.Ledger A collection of accounts maintained by a business.

7.Accounting Process Procedures used for analyzing, recording, classifying, and

summarizing the information to be presented in accounting reports.

8.Debit. An entry on the left side of an account.

9.Accounting System Procedures and methods used, including data processing

equipment, to collect and report accounting data.

10.General Journal An accounting record used to record all business activities for which a
special journal is not maintained.

11.Posting The process of summarizing transactions by transferring amounts from the

journals to the ledger accounts.

12.Subsidiary Ledger The grouping of supporting accounts that in total equal the balance
of a control account in the general ledger.

13.Master Account The general ledger account that summarizes the detailed I
nformation in a subsidiary ledger.

14. General Ledger A collection of all the accounts used by a business that could appear
on the financial statements.
 15. Double Entry Bookkeeping A system of recording transactions in a way that
maintains the equality of the accounting equation.

16. JournalRecords in which transactions are first entered, providing a chronological

record of business activity.

17. Journal Entry The recording of a transaction in which debits equal credits. It usually
includes a date and an explanation of the transaction.

ESSAY:

1. We know that the primary purpose of a financial manager is to maximize the

wealth of its shareholders. In 3 to 5 sentences, explain then why you think it is
important to know and follow the steps of the accounting process in the study of
business finance?