Accounting Video Flashcards
What is Financial Accounting?
The process of identifying, recording, summarising & analyzing an entity’s financial transactions & reporting them in financial statements.
What is a journal entry?
A record of a financial transaction
What is a general ledger?
A database where you store a complete record of all the accounts and journal entries.
What is an account?
A place where you record, sort & store all financial transactions that affect a related group of items.
What is a trial balance?
An accounting report showing the closing balances of all general ledger accounts.
What are adjusting entries?
Journal entries posted at the end of an accounting period to bring businesses books in line with the accrual method of accounting
What is the accrual method of accounting?
Revenue is recorded as it is earned and expenses are recorded as they are incurred.
What are financial statements?
Accounting reports that summarise a business’s activities over a period of time.
What is a closing entry?
A journal entry that transfers balances from temporary accounts to permanent accounts in the balance sheet.
What is economic benefit?
The potential for an asset to contribute either directly or indirectly to the flow of an entity’s cash.
