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| Financial Reports | written records that summarize the results of financial transactions affecting a business and report its current financial position. |
| Accounting Period | a block of time covered by an accounting report. |
| Accounting Cycle | the activities, or steps, that help a business keep its accounting records in an orderly manner. |
| Accounting Equation | Assets - Liabilities = Owner's Equity |
| Account | shows the balance for a specific item. |
| Accounts Receivable | the total amount of money owed to a business by customers. |
| Accounts Payable | amount of money owed, or payable, to the creditors of a business. |
| Double-entry Accounting | a systemor record-keeping in which each business transaction affects at least two accounts. |
| T Account | tool to increase or decrease each account that is affected by a transaction. |
| Debit | amount entered on the left side of a T account. |
| Credit | amount entered on the right side of a T account. |
| Journal | record of all the transactions of a business. |
| General Ledger | book or set of electronic files that contains the accounts used for a business. |
| Posting | process of recording transfers of amounts from the general journal to individual accounts in the general ledger. |
| Trial Balance | list of all the account names for a business and their current balances. |
| Financial Statements | reports that summarize changes that result from business transactions during an accounting period. |
| Income Statement | report of the net income or net loss for an accounting period. |
| Cost of Merchandise Sold | the amount of money the business paid for the goods that it sold to customers. |
| Gross Profit on Sales | profit made from selling merchandise before operating expenses are deducted. |
| Net Income | amount of revenue that remains after expenses for the accounting period are subtracted from the gross profit on sales. |
| Balance Sheet | report of the balances of all asset, liability, and owner's equity at the end of an accounting period. |
| Statement of Cash Flows | financial statement that reports how much cash a business took in and where te cash went. |
