| A | B |
|---|
| Adjusting entries | Journal entries recorded to update general ledger accounts at the end of the fiscal period |
| Ruling | A single line drawn under a column to indicate that the amounts above the line are ready to be totaled - A double line drawn under a column to indicate that the amounts just above the ruling are totals and no other entries need to be made |
| Temporary accounts | Accounts used to accumulate information until it is transferred to the owner’s capital account |
| Income summary accounts | A temporary account used to accumulate and summarize the closing entries for the revenue and expense accounts for a fiscal period |
| Closing entries | Journal entries that prepare temporary accounts for a new fiscal period |
| Post-closing trial balance | The accounting form prepared to ensure that debits equal credits after closing entries are posted - Lists only those accounts that have a balance |
| Accounting cycle | The series of accounting activities included in recording financial information for a fiscal period |
| Ledger | A group of accounts |
| General ledger | A ledger that contains all the accounts needed to prepare financial statements |
| Account number | The number assigned to the account |
| File maintenance | The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current |
| Opening an account | Writing an account title and number on the heading of an account |
| Posting | Transferring information from a journal entry to a ledger account |
| Correcting entry | An entry made to correct an error that is discovered after posting is completed |
| Proving cash | Determining that the amount of available cash agrees with the balance of the cash account |
| Fiscal period | The specific length of time (a month, a quarter, or a year) covered by the financial reports of a business |
| Worksheet | A columnar accounting form that is used to summarize the general ledger information needed to prepare the financial statements for a business |
| Trial balance | A proof of the equality of debits and credits in a general ledger |
| Adjustments | Changes recorded on a worksheet to update the general ledger accounts at the end of a fiscal period |
| Balance sheet | Summarizes what a business owns, what a business owes, and the current net worth on a specific date |
| Income statement | Reports net income or net loss financial information over a defined period of time |
| Net income | The difference between total revenue and total expenses when the total revenue is greater than total expenses |
| Net loss | The difference between total revenue and total expenses when total expenses are greater than total revenue |
| Matching Principle | A GAAP principle that requires matching expenses incurred in an accounting period with the revenue earned in the same period |
| Permanent accounts | Accounts used to accumulate information from one fiscal period to another |
