| A | B |
|---|
| accounting equation | equation showing the relationship among assets, liabilities, and owner's equity |
| adjusting entries | Journal entries made to bring general ledger accounts up to date |
| balance sheet | financial statement that reports assets, liabilities, and owner's equity on a specified date |
| closing entries | Journal entries used to prepare temporary capital accounts for a new fiscal period |
| net income | The difference between total revenue and total expenses when revenue is greater |
| net loss | The difference between total revenue and total expenses when expenses are greater |
| post-closing trial balance | A trial balance prepared after closing entries are posted |
| trial balance | A proof of the equality of debits and credits in a general ledger |
| work sheet | A columnar accounting form on which the financial condition of a business is summarized |
| Prepaid insurance | The account debited when cash is paid for insurance |
| Supplies | The account debited when cash is paid for supplies |
| Burt Supply Company | The account debited when cash is paid to Burt Supply Company for amount owed |
| Cash | The account debited when cash is received as an additional investment in the business |
| Rent Expense | The account debited when cash is paid for rent |
| Ada Singer, Drawing | The account debited when cash is paid to the owner for personal use |
| Cash | The account credited when cash is received from sales |
| Debit Sales, credit Income Summary | Entry to close all revenue accounts |
| Debit Income Summary, credit expenses | Entry to close all expense accounts |
| Debit Income Summary, credit Capital | Entry to close Income Summary when there is a net income |
| Debit Capital, credit Income summary | Entry to close Income Summary when there is a net loss |
| Debit Capital, credit Drawing | Entry to close owner's drawing account |
| Asset accounts | have a normal debit balance |
| work sheet | Summarizes a business' financial condition for a specific fiscal period |
| Income Statement debit column | Expense account balances are extended here on a work sheet |
| Adjusting entries are recorded in a journal | After adjustments are planned on a work sheet |
| Work sheet income statement columns | Amounts needed to prepare an income statement are obtained from here |
| Work sheet Balance Sheet columns | Amounts needed to prepare a balance sheet are obtained from here |
| Adequate Disclosure | Summarizing and reporting all of a business' financial information on financial statements is an appliction of the accounting concept ADEQUATE DISCLOSURE |
| "Zero" | After closing entries are posted, a business' expense accounts will be this |
| A "zero" balance | After closing entries are posted, a business' revenue account will have |
| will show a new balance | After closing entries are posted, a business' capital account |
| Work sheet Adjustment columns | Information for adjusting entries is obtained from here |
| chart of accounts | a list of accounts used by a business |
| post-closing trial balance | Trial balance prepared after the closing entries are posted |
| posting | Transferring information from a journal entry to a ledger account |
| proprietorship | Business owned by one person |
| revenue | An increase in owner's equity resulting from the operation of a business |
| service business | a business that performs an activity for a fee |
| source document | A business paper from which nformation is obtained for a journal entry |
| T account | An accounting device used to analyze transactions |
| temporary accounts | Accounts used to accumulate information until it is transferred to the owner's capital account |
| trial balance | A proof of the equality of debits and credits in a general ledger |
| Consistent Reporting | Following the same accounting procedures in the same way in each accounting period |
| Entry to establish Petty Cash | Debit Petty cash; credit Cash |
| Restrictive endorsement | An endorsement on the back of a check indicating that the check is to be accepted for deposit only |
| Miscellaneous expense | The account debited to record a bank service charge |
