| A | B |
|---|
| Adjusting Entries | Journal entries recorded to update general ledger accounts at the end of a fiscal period. |
| Permanent Accounts | Accounts used to accumulate information from one fiscal period to the next. |
| Temporary Accounts | Accounts used to accumulate information until it is transferred to the owner’s capital account. These accounts must be reduced to zero at the end of each fiscal period. |
| Closing Entries | Journal entries used to prepare temporary accounts for a new fiscal period. |
| Post-Closing Trial Balance | A trial balance prepared after the closing entries are posted. |
| Accounting Cycle | The series of accounting activities included in recording financial information for a fiscal period. |
| Examples of permanent accounts include: | Assets, liabilities and owner’s capital accounts. |
| Examples of temporary accounts include: | Income summary, sales, all expense accounts, net income or net loss, and owner’s drawing. |
| The heading of a post-closing trial balance includes: | The name of the business, the name of the statement, the date of the statement. |
| The account titles included on the post-closing trial balance are: | Cash, petty cash, supplies, prepaid insurance, liability accounts, and the owner’s capital account. |
