Chap 7 Terms Flashcards
Accrual
an accounting method in which revenues and expenses are recorded when they occur, not necessarily when any cash is exchanged.
Adjusting Entries
journal entries created at the end of an accounting period to allocate income and expenses to the proper accounts.
Allocation
the storing of costs in one account and then dividing the costs based on quantifiable activity.
Assets
an item of value that a business uses in the course of its operations and from which it expects future economic benefit.
Balance Sheet
a financial statement that lists the totals in the assets, liability, and owners’ equity accounts of a firm for a specific date.
Credit
the right side of the T-account
Debit
the left side of the T-account
Expense
the cost of doing business, which may contain both cash and non-cash amounts
Fiduciary
a relationship, specially financially, built on trust between a trustee and a beneficiary.
GAAP
Generally Accepted Accounting Principles
General Journal
a chronological record of a firm’s financial transactions.
General Ledger
a record of a firm’s financial transactions, grouped by account.
Income Statement
a financial report used to determine a firm’s net income by computing the difference between revenues and expenses for a period; aka, P&L Statement
Labor Reports
reports that contain details about the number of hours worked and the wages paid to employees
Liabilities
a financial obligation of the firm arising from revenues received in advance of services or sales or expenses incurred but not paid
