Vocab
Easily converted into cash or used up through the day-to-day operations of the business within the next 12 months.
Current Assets
What 3 items are included in Balance Sheet
Assets, Liabilities and Owner's Equity
Which 3 type of accounts are closed at the end of the period?
Revenue, Expenses & Owner's Withdrawals
Temporary holding account used to close the revenue and expense accounts?
Income Summary Account
Used to operate a business and are not expected to turn into cash or be used up within the next 12 months.
Non-current Assets
A permanent document used to record what you own (assets), what you owe (liabilities) and what you are worth (net worth) on a specific date.
Balance Sheet
Which 3 type of accounts are considered permanent accounts and are NOT closed?
Assets, Liabilities & Owners Capital
Net Income or Loss for the period
Amounts due to be paid within the next 12 months. Ex. Accounts Payable, interest payable and unearned revenue.
Current Liabilities
Something you own
Asset
Is Revenue debited or credit when closing out?
Debited
A temporary record used to show and summarize revenue and expenses
income Statement
Are amount due to be paid after 12 months . Ex. Notes payable and mortgages.
Non-current Liabilities
Something you owe
Liabilities
Is Expense debited or credited when closing out?
Credited
Assets = 3,500
Liabilities = 1,500
Owner's Equity?
Owner's Equity = 2,000
Which accounts are closed at the end of a period.
Temporary Accounts
The difference between what you own and what you owe is called?
Net Worth
What is the purpose of closing entries?
To reset balances to for the new accounting period
What is the accounting equation?
Assets=Liabilities + Owners Equity