Financial Statements
This financial statement shows a company's financial position at a specific point in time.
What is the balance sheet?
This type of account includes cash and accounts receivable.
What are asset accounts?
This term describes the financial statement that summarizes revenues and expenses.
What is an income statement?
In accounting, this entry increases assets.
What is a debit?
This principle requires that financial statements reflect actual costs rather than market values.
What is the cost principle?
This statement reports a company's revenues and expenses over a period of time.
What is the income statement?
These accounts track obligations and debts, such as accounts payable and loans.
What are liability accounts?
This term refers to a record of all transactions in chronological order.
What is a journal?
You can use this entry to record an increase in liabilities.
What is a credit?
This accounting principle dictates that revenues should be recognized when earned, regardless of when cash is received.
What is the revenue recognition principle?
This statement provides information about cash inflows and outflows from operating, investing, and financing activities.
What is the statement of cash flows?
This category of accounts includes revenues earned from sales or services provided.
What are income accounts?
This term is used for the systematic allocation of the cost of a long-term asset over its useful life.
What is depreciation?
This account type decreases with a credit entry.
What is an asset account?
This principle ensures that all financial information is presented clearly and in a way that helps users understand the financial health of the entity.
What is the full disclosure principle?
This statement shows changes in equity over a specific period, including contributions by and distributions to owners.
What is the statement of changes in equity?
Accounts like rent expenses and salaries expenses fall under this category.
What are expense accounts?
This term refers to an adjustment made to a company’s financial records to account for accrued revenues or expenses.
What is an accrual?
This type of account increases with a debit and decreases with a credit.
What is an expense account?
This principle requires that expenses be matched with the revenues they help generate.
What is the matching principle?
This report details the components of retained earnings and how they have changed over a fiscal period.
What is the retained earnings statement?
This account type tracks the owner's investment and equity in the business.
What is an owner’s equity account?
This term describes the difference between total revenues and total expenses.
What is net income?
In double-entry bookkeeping, this entry must always be balanced by an equal and opposite entry.
What is a debit and a credit?
This principle assumes that a business will continue to operate indefinitely.
What is the going concern principle?