6-1
The length of time for which a business summarizes its financial information and reports its financial information
What is a Fiscal Period
Cash paid for an expense in one fiscal period that is not used until a later period
What is a Prepaid Expense
A financial statement that reports the value of a business’s assets, liabilities, and owner’s equity on a specific date
What is a Balance Sheet
A fiscal period consisting of 12 months
What is a Fiscal Year
Reporting income when it is earned and expenses when they are incurred
A financial statement showing the revenue and expenses for a fiscal period
What is an Income Statement
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements
What is a Work Sheet
Reporting income when the cash is received and expenses when the cash is paid
What is Cash Basis Accounting
The difference between total revenue and total expenses when total revenue is greater
What is Net Income
Proof of the equality of debits and credits in a general ledger
What is a Trial Balance
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
What are Adjustments
The difference between total revenue and total expenses when total expenses are greater
What is Net Loss
Journal entries recorded to update the general ledger accounts at the end of a fiscal period
What are Adjusting Entries