Financial Statements
This statement shows a company’s assets, liabilities, and owner’s equity.
Balance sheet
A business owned by one person.
Proprietorship
A record of a business transaction.
Source Document
his side of a T-account increases assets.
Debit
Money earned from sales
Revenue
This report shows revenues and expenses over a period of time.
Income statement
A business owned by two or more people.
Partnership
Transferring information from a journal entry to a ledger account.
Posting
This side of a T-account increases liabilities.
Credit
Money spent on operating a business.
Expense
This statement shows inflows and outflows of cash.
Cash flow statement
A business owned by stockholders.
Corporation
An entry that records a business transaction in the journal.
Journal Entry
The tool shaped like a “T” that accountants use to analyze transactions.
T-Account
The amount left after subtracting expenses from revenue when positive.
Profit
Another name for an income statement, often used in business.
Operating statement
The value of an owner’s claim to the business after liabilities are subtracted.
Owner's equity
A list of all accounts and their balances at a particular date.
Trial balance
This increases revenue.
Credit
When expenses are greater than revenue.
Loss
A spreadsheet used to organize trial balances before financial statements.
Worksheet
A period of time covered by an accounting report.
Accounting period
The process of analyzing, recording, summarizing, and reporting financial information.
Accounting Cycle
This decreases owner’s equity when an owner takes money out.
Withdrawal (debit)
The basic equation showing the relationship among assets, liabilities, and owner’s equity.
Accounting Equation