44 terms

Accounting Unit 2

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 - l period
changes recorded on a work sheet to update general ledger accounts at the end of the fisca
Assets -
anything of value that is owned
Balance sheet -
a financial statement that reports assets, liabilities, and owner's equity on a specific date.
Business entity concept -financial information
financial information is recorded and reported separately from the owner's personal
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 a ledger
Credit -
an entry to the right side of a T account
Debit -
an amount entered 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 total expenses for a fiscal period
Ledger -
a group of accounts
Liability -
an amount owned 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 the account title and number on the heading of an account
Owner's equity -
the amount remaining after the value of all liabilities 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