Keywords Flashcards
EBIT
Earnings before income and taxes
EBITDA
Earnings before income, taxes, depreciation, and amortization
Why type of industries are often using EBITDA?
Capital intensive industries
Amortization
the practice of spreading an intangible asset’s cost over that asset’s useful life
Depreciation
the expensing of a fixed asset over its useful life
Corporation
A legal entity separate and distinct from the individuals who invest in it
Equity
Stock in a company; the investors’ claims on the company’s assets
Dividend
Company profit paid out to stock holders
General Ledger
A database that stores a complete record of all accounts and journal entries
Account (Financial Accounting)
A place where we record, sort, and store all financial transactions that affect a related group of items
What is an unadjusted trial balance for?
To ensure your debits equal your credits (to ensure the accounting equation is true)
Adjusting entries
Journal entries posted at the end of an accounting period to bring a business’s books in line the accrual method of accounting
Accrual method of accounting
Revenue is recognized as its earned expenses are recorded as they incurred
Financial statements
Accounting reports that summarize a business’s activities over a period of time
Closing entry
A journal entry that transfers balances from temporary accounts to permanent accounts on the balance sheet
