AR Computerized Accounting I Unit 2

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Account

a record summarizing all the information pertaining to a single item in the accounting equation.

Account Balance

the amount in an account.

Account Number

The number assigned to an account.

Account Title

the name given to an account.

Accounting Cycle

The series of accounting activities included in recording financial information for a fiscal period.

Accounting Equation

An equation showing the relationship among assets, liabilities, and owner's equity.

Accounting Period Cycle Concept

changes in financial information are reported for a specific period of time in the form of financial statements.

Accounting Record

an organized summary of a business's financial activities.

Accounting System

a planned process for providing financial information that will be useful to management.

Adequate Disclosure Concept

financial statements that contain all information necessary to understand a business's financial condition.

Adjusting Entries

Journal entries recorded to update general ledger accounts at the end of a fiscal period.

Adjustments

changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

Assets

Any items of value that you own.

Balance Sheet

a financial statement that reports assets, liabilities, and owner's equity on a specific date.

Business Entity Concept

financial information is recorded and reported separately from the owner's personal financial information.

Capital

the account used to summarize the owner's equity in a business.

Chart of Accounts

A list of accounts used by a business.

Closing Entries

Journal entries used to prepare temporary accounts for a new fiscal period.

Consistent Reporting Concept

the same accounting procedures are followed in the same way in each accounting period.

Correcting Entry

a journal entry made to correct an error in the ledger.

Credit

an entry to the right side of a T account.

Debit

An amount recorded on the left side of a T Account.

Equities

financial rights to the assets of a business.

File Maintenance

The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current.

Fiscal Period

the length of time for which a business summarizes and reports financial information.

General Ledger

a ledger that contains all accounts needed to prepare financial statements.

Going Concern Concept

financial statements are prepared with the expectation that a business will remain in operation indefinitely.

Income Statement

a financial statement showing the revenue and expenses for a fiscal period.

Ledger

a group of accounts.

Liability

an amount owed by a business.

Matching Expenses With Revenue Concept

revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period.

Net Income

The difference between total revenue and total expenses when total revenue is greater.

Net Loss

The difference between total revenue and total expenses when total expenses are greater.

Objective Evidence Concept

a source document is prepared for each transaction.

Opening an Account

writing an account title and number on the heading of an account.

Owner's Equity

the amount remaining after the value of all liabilities is subtracted from the value of all assets.

Permanent Accounts

accounts used to accumulate information from one fiscal period to the next.

Post-Closing Trial Balance

A trial balance prepared after the closing entries are posted.

Posting

Transferring information from a journal entry to a ledger account.

Proprietorship

a business owned by one person.

Temporary Accounts

accounts used to accumulate information until it is transferred to the owner's capital account.

Transaction

a business activity that changes assets, liabilities, or owner's equity.

Trial Balance

a proof of the equality of debits and credits in a general ledger.

Work Sheet

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.

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