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Accounting Unit 6
| Term | Definition |
|---|---|
| Fiscal Period | The length of time for which a business summarizes its financial information and reports its financial performance |
| Fiscal Year | A fiscal Period consisting of 12 consecutive months |
| Work Sheet | A columnar accounting form used to summarize the general ledger information needed to prepare financial statements |
| Trial Balance | A proof of equality of debits and credits in a general ledger |
| Prepaid Expense | cash paid for an expense in one fiscal Period that is not used until a later period |
| Accrual Basis of Accounting | Reporting income when it is earned and expenses when they are incurred |
| Cash Basis of Accounting | Reporting income when the cash is received and expenses when the cash is paid |
| Adjustments | Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal Period |
| Balance sheet | A financial statement that reports assets, liabilities, and owner's Equity on a specific date |
| Income statement | A financial statement showing the revenue and expenses for a fiscal period |
| Net income | The difference between total revenue and total expenses when total revenue is greater |
| Net loss | The difference between total revenue and total expenses when total expenses are greater |
| Adjusting Entries | Journal entries recorded to update general ledger accounts at the end of a fiscal period |
| Adjusted Trial Balance | A trial balance prepared after adjusting entries are posted |
Created by:
boniceth000
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