Accounting Terms

Question 1

accounting period

Answer 1

A specific timeframe during which financial transactions are recorded, and financial statements are prepared typically a month quarter or year 

Question 2

Chart of accounts

Answer 2

A systematic list of all accounts used by businesses, each account, representing a unique financial element, facilitating the organization and classification of financial transactions 

Question 3

drawings

Answer 3

withdrawals of assets or funds by the owners of the business for personal use, separate from regular salary or dividends 

Question 4

Equity equation

Answer 4

The accounting equation representing the owners claim on the assets of a business expressed as assets, equal liabilities plus owners equity 

Question 5

Expenses

Answer 5

costs and inccured by a business and its operation to generate revenue, representing decreases in equity 

Question 6

Financial period

Answer 6

The duration for which financial statements are prepared, covering income expenses, and overall financial performance 

Question 7

fiscal period

Answer 7

The specific timeframe used by business or government for budgeting and financial reporting purposes, not necessarily aligned with the calendar year 

Question 8

Income statement

Answer 8

A financial statement summarizing a businesses, revenue, expenses gains and losses over a specific period resulting in net income or net loss 

Question 9

Income tax return

Answer 9

A document filled with tax authorities, providing information on a taxpayers income deductions and tax liability, facilitating the calculation and payment of taxes 

Question 10

Matching principal

Answer 10

an accounting principle that requires expenses to be recorded in the same. As the related revenues, they help generate, ensuring accurate financial reporting. 

Question 11

Net income

Answer 11

The total profit earned by a business calculated as revenue minus expenses

Question 12

Net loss

Answer 12

The overall negative result, when a business is expenses, exceeds its revenues during a specific period

Question 13

Revenue

Answer 13

The total income generated by a business through its primary operations, sales of goods or services

Question 14

revenue, recognition principle

Answer 14

an accounting principal, stating that revenue should be recognized when it is earned and realizable irrespective of when the payment is received 

Question 15

Time period. Concept

Answer 15

an accounting concept, assuming that the economic life of a business can be divided into distinct and measurable time periods for financial reporting and analysis