Income Statement Inquiries
The two account types present in an income statement
What are Revenues and Expenses?
The main purpose for writing adjusting entries at the end of an accounting period
What is updating accounts to their proper balances?
The category of accounts that are closed during closing entries
What are temporary accounts?
The financial statement for which the asset, liability, and owner's equity accounts are reported
Definition of a credit
What is the right side of a T-account?
This line of an income statement shows the total amount a company earns before subtracting expenses
What is total revenue?
These two types of adjusting entries occur when actions happen first, and dollars happen later
What are accrued revenues & expenses?
This account is used to close revenue and expense accounts, and transfer the net income or loss.
What is Income Summary?
The Classified Balance Sheet classification for a 15-year Notes Payable
What is a long-term liability?
What each letter stands for in the common abbreviation GAAP
What is generally accepted accounting principles?
The term which results when you subtract expenses from revenues
What is net income?
The type of adjusting entry made when the ending supplies count is lower than the starting supplies count
What is a supplies expense adjustment?
This internal document helps accountants organize and adjust account balances into columns before preparing financial statements and then closing the accounts
What is a Work Sheet?
The account type of Unearned Revenue
What is a liability?
The three main purposes of Accounting
What is identifying, recording, and communicating financial/business information?
The accounting principle which states revenue is recorded when goods/services are provided to customers
What is the revenue recognition principle?
The account that is credited when Unearned Sales Revenue has finally been earned
What is Sales Revenue?
The account that is debited during the final step of the closing process, and the account that is credited during the final step of the closing process.
What is Owner, Capital - Debit and Owner, Drawings/Withdrawals - Credit?
This type of account is linked with another account, having its opposite normal balance and taking away from its value
What is a contra account?
The three sides of the Fraud Triangle, or the three conditions under which fraud is most likely to occur.
What is pressure, opportunity, and rationalization?
The accounting basis that ensures revenues are reported when they are earned, and expenses reported when incurred
What is the accrual basis of accounting?
The two accounts that would be affected when adjusting for depreciation on equipment
What is Depreciation Expense & Accumulated Depreciation - Equipment?
The final step in the accounting cycle, which aims to report all permanent ledger accounts and their balances
What is the post-closing trial balance?
The other term for plant assets, commonly abbreviated as PPE or PP&E, which encompass long-term assets like Buildings, Equipment, and Land
The collection of all accounts and their balances on either the debit or credit side, typically posted to after journalizing an entry.
What is the General Ledger?