| A | B |
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| Accounting cycle | The various activities a business completes to organize its accounting records in an orderly fashion |
| Trial Balance | A periodic report prepared by a business to test the equality of total debits and credits |
| Receipt | The source document for recording a payment of cash. |
| Fiscal Period | The period of time for which acounting information is reported on financial statements. |
| Accounting System | a System for measuring, recording, and reporting the financial activities of a business |
| Capital | Money invested by the owner in a business. |
| Sole Proprietorship | A business with a single owner. |
| Income Statement | A report of a business's net income or net loss over an entire fiscal period. |
| Profit | When a business earns more money from the sales of good or services than it spends to operate. |
| Closing Entries | The entries made to close out or reduce to zero the balance of certain general ledger accounts. |
| Bank Reconciliation | The process of determining any differences between the balance shown on the bank statement and the checkbook balance. |
| Net Income | When revenues are greater than expenses. |
| Posting | Trensferring data from the journal to the ledger. |
| Normal Balance Side | The increase side of an account. |
| Liability | A person or business to which money is owed. |
| Permanent | The balance of these accounts are carried forward from one period to the next. |
| Revenue | Income earned from the sale of goods and services. |
| Expenses | The costs of goods or services used to operate a business. |
| Corporation | A business organization that must get permission from the state to operate and which often has hundreds of owners. |
| Basic Accounting Equation | Assets = Liabilities + Owner's Equity. |
| Owner's Equity | Carlos Hidalgo, Capital is classified as this type of account. |
| Income Summary | A general ledger account used to accumulate and summarize the revenue and expenses for a period. |
| Outstanding Checks | Checks that have been written but not yet presented to the bank for payment. |
