1.
Fiscal period: The length of time of which a business summarizes and reports financial information.
2.
General ledger: A ledger that contains all accounts needed to prepare financial statements.
3.
Going concern concept: Financial statements are prepared with the expectation that a business will remain in operation indefinitely.
4.
Income statement: A financial statement showing the revenue and total expenses for a fiscal period.
5.
Ledger: A group of accounts.
6.
Liability: An amount owed by a business.
7.
Matching expenses with revenue concept: When revenue from business activities and expenses associated with earning that revenue are recorded in the same accounting period.
8.
Net income: The difference between total revenue and total expenses when total revenue is greater.
9.
Net loss: The difference between total revenue and total expenses when total expenses are greater.
10.
Objective evidence concept: A source document is prepared for each transaction.
11.
Opening an account: Writing the account title and number on the heading of an account.
12.
Owner's equity: The amount remaining after the value of all liabilities is subtracted from the value of all assets.
13.
Permanent accounts: Accounts used to accumulate information from one fiscal period to the next.
14.
Post-closing trial balance: A trial balance prepared after the closing entries are posted.
15.
Posting: Transferring information from a journal entry to a ledger account.
16.
Proprietorship: A business owned by one person.
17.
Temporary accounts: Accounts used to accumulate information until it is transferred to the owner's capital account.
18.
Transaction: A business activity that changes assets, liabilities, or owner's equity.
19.
Trial balance: A proof of the equality of debits and credits in a general ledger.
20.
Work sheet: A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
