Income Summary

the account in the general ledger used for summarising the revenue and expenses for a fiscal period

closing entries

journal entries made to close out or reduce to zero the balances in the temporary capital accounts and then transfer the net income or loss to the capital account

balance sheet

a financial statement that reports the final balances in all the asset, liability and owner’s equity accounts at the end of the fiscal period

ratio analysis

a numerical comparison of two items on a financial statement used to evaluate the relationship between the two items

financial statements

summarise the changes resulting from business transactions that have occurred during a fiscal period

chequing account

used by a business to deposit cash in a bank and write cheques against the account balance

internal controls

steps that a business takes to protect its cash and other assets

income statement

reports a business’s net income or net loss for a fiscal period