Accounting Chapter 6

Question 1

Fiscal period

Accounting period

Answer 1

The length of time for which a business summarizes it’s financial performance

Question 2

Fiscal year

Answer 2

Consisting of 12 consecutive months

Question 3

Worksheet

Answer 3

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements

Question 4

Trial balance

Answer 4

A proof of equity of debits and credits in a general ledger

Question 5

Prepaid expense

Answer 5

Cash paid for an expense in one fiscal period that is not used until later period

Question 6

Accrual base of accounty

Answer 6

Reporting income when it is earned and expenses when they are incurred

Question 7

Cash basis of accounting

Answer 7

Reporting income when the cash is received in expenses when the cash is paid

Question 8

Adjustments

Answer 8

Changing recorded on a worksheet to update general ledger accounts at the end of a fiscal period

Question 9

Balance sheet

Answer 9

A financial statement that reports the value of a business is assets liabilities and owners equity he on a specific date

Question 10

Income statement

Answer 10

A financial statement showing the revenue and expenses for a fiscal period

Question 11

Net income

Answer 11

The difference between total revenue and total expenses when total revenue is greater

Question 12

Net loss

Answer 12

The difference between total revenue and total expenses when the total expenses are greater

Question 13

Adjusting entries

Answer 13

Journal entries recorded to update general ledger accounts at the end of a fiscal period