Financial Position & Business Transactions
Recording Transactions in T-Accounts
The Income Statement
Journal & Ledger
The Worksheet and Classified Financial Statements
100
a financial statement that shows the assets, liabilities, and owner’s equity at a specific date
What is a balance sheet?
100
a form in which changes caused by transactions are recorded
What is an account?
100
is the difference between revenue and expenses when revenue > expenses
What is net income?
100
recording entries in the journal
What is journalizing?
100
is cash or some other asset that, in the normal course of operations, will be converted to cash or sold or consumed within the year
What are current assets?
200
items of value owned by a business or person
What are assets?
200
the accounting term used for the left side of the account
What is debit?
200
money or the promise of money received from the sale of goods and services
What is revenue?
200
a list of the accounts in the ledger and their numbers
What is the chart of accounts?
200
are expense payments made in advance
What are prepaid expenses?
300
a person/business who owes money or goods
What is a debtor?
300
a system of financial record keeping where debit entries must equal credit entries for each transaction
What is double entry accounting?
300
expenses should be recorded and matched with the revenue they help to generate during the same accounting period
What is the matching principle?
300
a group of accounts
What is the ledger?
300
is a device that organizes the accounting data required for the preparation of financial statements
What is a Work sheet?
400
refers to the total amount due from debtors
What is accounts receivable?
400
the accounting term used for the right side of the account
What is credit?
400
A business that records revenue when earned and expenses when incurred is using the _____________________.
What is the accrual basis of accounting?
400
a chronological record of transactions (kept by order of date)
What is a journal?
400
lists items in special categories such as current and fixed assets, and current and long-term liabilities
What is a classified balance sheet?
500
when an asset is obtained, its value is recorded at the actual cost to the business
What is the cost principle?
500
is a group or file of accounts that can be recorded on paper or via computer
What is the ledger?
500
is the time period covered by financial statements as it relates to taxes
What is fiscal period?
500
records the assets, liabilities, and owner’s equity when a business first begins operations.
What is the opening entry?
500
is the order in which assets that last a short while may be converted into cash
What is liquidity order?
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