definitions
what are adjusting entries?
journal entries are recorded to update general ledger accounts at the end of a fiscal period
what are temporary accounts?
accounts used to accumulate information until it is transferred to the owner’s capital account
How is the owner’s capital amount calculated?
if total expenses exceed total revenue, a net loss is reported on an income statement
Adequate Disclosure
when financial statements have all information necessary to understand a business's financial situation
Balance Sheet-
reports liabilities assets and owner’s equity on a specific date
What are the two financial statements that are prepared from the information on the worksheet?
balance sheet and income statement
what is a fiscal period?
The fiscal period is the length of time that business summaries its financial information and reports its financial performance
Permanent accounts-
accounts used to accumulate information from one fiscal period to the next
what is the Net Income Ratio?
net income divided by total sales = net income ratio
what is Managerial Accounting?
the area of accounting that focuses on reporting information to internal users
Accounting Period Cycle
the accounting period cycle for the next fiscal period
Matching Expenses
with the Revenue accounting concept, total expenses divided by total sales = total expenses ratio
Closing entries
journal entries used to prepare temporary accounts for a new fiscal period
Accounting Cycle
series of accounting activities included in recording financial information
Income Statement Heading
-income summary