Chapter 6 Vocab
The length of time for which a business summarizes its financial information and reports its financial performances.
What is Fiscal Period?
The area of accounting that focuses on reporting information to external users.
What is Financial accounting?
Accounts used to accumulate information from one fiscal period to the next.
What is Permanent Accounts?
A concept that is applied when the same accounting procedures are followed in the same way in each accounting period.
What is Consistent Reporting?
January 31. Made adjusting entry for Supplies. $530
Write the date Jan.31, Write Supplies Expense in the debit column and $530 for the amount debited, Write Supplies in the Credit column and $530 for the amount debited.
A columnar accounting form used to summarize general ledger information and prepare financial statements.
What is Worksheet?
The area of accounting that focuses on reporting information to internal users.
What is Managerial Accounting?
Accounts used to accumulate information until it is transferred to the capital account.
What is Temporary Accounts?
A concept that is applied when changes in financial information are reported for a specific period of time in the form of financial statements.
What is Accounting Period Cycle?
January 31. Made adjusting entry for Prepaid Insurance.$150
Write the date Jan.31, Write Insurance Expense in the debit column and write $150 for the amount debited, Write Prepaid Insurance in the credit column and write $150 for the amount credited.
A financial statement that reports the value of a business's assets, liabilities, and owner’s equity on a specific date.
What is Balance Sheet?
The financial statement that reports the changes in the capital account for a proprietorship for a period of time.
What is Statement of Owner's Equity?
Journal entries used to prepare temporary accounts for the next fiscal period.
What is Closing Entries?
A concept that is applied when revenue from business activities and expenses are associated with earning that revenue and are recorded in the same accounting period.
What is Matching Expenses with Revenue?
What are all of the steps to Prepare an Income Statement from a worksheet?
Write Revenue for the first section, Write sales on the second line, Write the balance of sales, Write Expenses for the second section, Write all of the Expenses, Write the balance of all the Expenses, Rule a single line, Write Total Expenses on the next line, Write the total expenses, Calculate the Net Income, Rule a single line, Write the words Net Income on the next line, Write the Net Income, Rule Double Lines.
A financial statement that reports the revenues and expenses for a fiscal period.
What is Income Statement?
The comparison between two components of financial information.
What is Financial Ratio?
A trial balance prepared after closing entries are posted.
What is Post Closing Trial Balance?
A concept that is applied when the financial statements contain all the information necessary to understand a business’s financial condition.
What is Full Disclosure?
January 31. Closing Entry for Sales with a value of $5,820
Write the date, Write Sales in the debit column and $5,820 for the amount debited, Write Income Summary in the credit column and $5,820 for the amount credited.
Journal entries recorded to update the balance of general ledger accounts at the end of a fiscal period.
What is Adjusting Entries?
The calculation and interpretation of a financial ratio.
What is Ratio Analysis?
The series of accounting activities included in recording information for a fiscal period.
What is Accounting Cycle?
A concept that is applied when financial statements are prepared with the expectation that the business will remain in operation indefinitely.
What is Going Concern?