| A | B |
|---|
| accounting cycle | the series of accounting activities included in recording financial information for a fiscal period |
| adjusting entries | journal entries recorded to update general ledger accounts at the end of a fiscal period |
| closing entries | journal entries used to prepare temporary accounts for a new fiscal period |
| permanent accounts | accounts used to accumulate information from one fiscal period to the next |
| post-closing trial balance | a trial balance prepared after the closing entries are posted |
| temporary accounts | accounts used to accumulate information until it is transferred to the owner’s capital account |
| accounting equation | ASSETS EQUAL LIABILITIES PLUS OWNER’S EQUITY |
| service business | abusiness that performs an activity for a fee |
| proprietorship | a business owned by one person |
| taccount | an accounting device used to analyze transactions |
| transaction | ”a business activity that changes assets |
| drawing account | a temporary account used to with record withdrawals of assets from the business |
| income summary account | a temporary account used to show net income or net loss at the end of a fiscal period |
| fiscal period | the length of time for which a business summarizes and reports financial information |
| double lines | drawn across both amount columns in the post-closing trial balance to indicate that the totals have been verified as correct |
| net income | total revenue is greater than total expense |
| net loss | total expenses are greater than total revenue |
| certified financial planner | “sometimes referred to as a personal financial advisor who advises clients on taxes |
| occupational outlook handbook | up-to-date resource for researching careers and occupations through the Bureau of Labor Statistics |
| post | in post-closing trial balance means AFTER accounts have been adjusted and closed |
| matching concept | accounting concept in which the expenditures of a firm for a particular accounting period are to be matched with the revenue of the same accounting period |
| adjusting entry for supplies | debit to supplies expense and credit to supplies |
| adjusting entry for prepaid insurance | debit to insurance expense and credit to prepaid insurance |
| closing entry for sales | debit to sales and credit to income summary |
| closing entry for all expense accounts | debit to income summary and credit to all expense accounts |
| closing entry for income summary with a net income | credit to income summary and debit to owner’s capital |
| closing entry for income summary with a net loss | debit to capital account and credit to income summary |
| closing entry for owner’s drawing account | debit to capital account and credit to owner’s drawing account |
| in balance | the total of the left side debit must equal the right side credit in the accounting equation |
| zero balance | temporary accounts are omitted from the post-closing trial balance |
| single line | drawn in both the balance debit and balance credit columns when a temporary account is in balance with zero balance |
| analyze transactions | step 1 of the accounting cycle |
| journalize | step 2 of the accounting cycle |
| post | step 3 of the accounting cycle |
| prepare worksheet | step 4 of the accounting cycle |
| prepare financial statements | step 5 of the accounting cycle |
| journalize adjusting and closing entries | step 6 of the accounting cycle |
| post adjusting and closing entries | step 7 of the accounting cycle |
| post-closing trial balance | step 8 of the accounting cycle |
