Accounting Basics
What is the Accounting Equation
A=L+OE
This financial statement reports the net income or loss for a specific period.
Income Statement
What is the "Normal Balance" side for all Liability and Owner's Equity accounts?
Credit
What does US GAAP stand for?
United States Generally Accepted Accounting Principles
This documents lists all acocounts and their balances to prove debits equal credits
Trial Balance
This statement shows the changes in owner's equity during the fiscal period.
Statement of Owner's Equity
If a company purchases an equipment worth $1000 in cash, do their assets increase? dcrease? or stay the same? Why?
Stays the same (debit equipment $1000; credit cash $1,000)
This is the final step in the tnire accounting cycle.
Post-Closing Trial Balance
The first step in the accounting cycle is to analyze these.
Source Documents
This specific section of the worksheet is used to "bridge" the Trial Balance and the Financial Statements.
Adjustment Columns
A "Drawing" account is increased by a debit, which ultimately has this effect on total equity.
Decreases equity
The "book of original entry" where transactions are first recorded.
General Journal
The length of time for which a business summarizes and reports financial data.
Fiscal Period
On a worksheet, if the total of the Income Statement Credit column is higher than the Debit column, you have this.
Net Income
If the cash account has a t-account with total debits of $5,000 and total credits of $3,200, what is the type of balance and the amount?
Debit balance of $1,800
This process involves transferring information from the journal to the ledger.
Posting
What is the difference in the purpose of the balance sheet and income statement?
B/S - shows a company's financial position at a specific point in time, what they own and owe
I/S - shows a company's profitability over a period of time
The amount of Net Income transferred to this account on the Balance Sheet.
Capital Account
If you sold services on account to Academy Sports, what would the debit and credit?
Debit - Accounts Receivable
Credit - Sales
These accounts (like Sales and Expenses) are closed at the end of the year.
Temporary Accounts