accounting chapter 6 Flashcards
consistent reporting
is applied when the same accounting procedures are followed in
the same way in each accounting period.
fiscal period
The length of time for which a business summarizes its
financial information and reports its financial
performance
accounting period
another name for a fiscal period
fiscal year
A fiscal period consisting of twelve consecutive months
work sheet
A columnar accounting form used to summarize the
general ledger information needed to prepare financial
statements
prepaid expense
Cash paid for an expense in one fiscal period that is not used until a
later period
accrual basis of accounting.
Reporting income when it is earned and expenses when they are
incurred
cash basis of accounting.
Reporting income when the cash is received and expenses when the
cash is paid
adjustments
Changes recorded on a work sheet to update general ledger accounts
at the end of a fiscal period
balance sheet.
A financial statement that reports the value of a
business’ assets, liabilities, and owner’s equity on
a specific date
income statement.
A financial statement showing the revenue
and expenses for a fiscal period
net income.
The difference between total revenue and total
expenses when total revenue is greater
net loss.
The difference between total revenue and total
expenses when total expenses are greater
adjusting entries.
Journal entries recorded to update general ledger
accounts at the end of a fiscal period
trial balance
A proof of the equality of debits and credits in a general ledger.
