Unit 2: Basic Accounting Cycle – Service Business
1. Account – a record summarizing all the information pertaining to a single item in the accounting equation
2. Account balance – the amount in an account
3. Account number – the number assigned to an account
4. Account title – the name given to an account
5. Accounting cycle – the series of accounting activities included in recording financial information for a fiscal period
6. Accounting equation – an equation showing the relationship among assets, liabilities, and owner's equity
7. Accounting period cycle concept – changes in financial information are reported for a specific period of time in the form of financial statements
8. Accounting record – an organized summary of a business's financial activities
9. Accounting system – a planned process for providing financial information that will be useful to management
10. Adequate disclosure concept – financial statements that contain all information necessary to understand a business's financial condition
11. Adjusting entries – journal entries recorded to update general ledger accounts at the end of a fiscal period
12. Adjustments – changes recorded on a work sheet to update general ledger accounts at the end of the fiscal period
13. Assets – anything of value that is owned
14. Balance sheet – a financial statement that reports assets, liabilities, and owner's equity on a specific date.
15. Business entity concept – financial information is recorded and reported separately from the owner's personal financial information
16. Capital – the account used to summarize the owner's equity in a business
17. Chart of accounts – a list of accounts used by a business.
18. Closing entries – journal entries used to prepare temporary accounts for a new fiscal period
19. Consistent reporting concept – the same accounting procedures are followed in the same way in each accounting period
20. Correcting entry – a journal entry made to correct an error in a ledger
21. Credit – an entry to the right side of a T account
22. Debit – an amount entered on the left side of a T account
23. Equities – financial rights to the assets of a business
24. File maintenance – the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
25. Fiscal period – the length of time for which a business summarizes and reports financial information
26. General ledger – a ledger that contains all accounts needed to prepare financial statements
27. Going concern concept – financial statements are prepared with the expectation that a business will remain in operation indefinitely
28. Income statement – a financial statement showing the revenue and total expenses for a fiscal period
29. Ledger – a group of accounts
30. Liability – an amount owed by a business
31. Matching expenses with revenue concept – revenue from business activities and expenses associated with earning that revenue are recorded in
the same accounting period
32. Net income – the difference between total revenue and total expenses when total revenue is greater
33. Net loss – the difference between total revenue and total expenses when total expenses are greater
34. Objective evidence concept – a source document is prepared for each transaction
35. Opening an account – writing the account title and number on the heading of an account
36. Owner's equity – the amount remaining after the value of all liabilities subtracted from the value of all assets
37. Permanent accounts – accounts used to accumulate information from one fiscal period to the next
38. Post-closing trial balance – a trial balance prepared after the closing entries are posted
39. Posting – transferring information from a journal entry to a ledger account
40. Proprietorship – a business owned by one person
41. Temporary accounts – accounts used to accumulate information until it is transferred to the owner's capital account
42. Transaction – a business activity that changes assets, liabilities, or owner's equity
43. Trial balance – a proof of the equality of debits and credits in a general ledger
44. Work sheet – a columnar accounting form used to summarize the general ledger information needed to prepare financial statements
1. Account – a record summarizing all the information pertaining to a single item in the accounting equation
2. Account balance – the amount in an account
3. Account number – the number assigned to an account
4. Account title – the name given to an account
5. Accounting cycle – the series of accounting activities included in recording financial information for a fiscal period
6. Accounting equation – an equation showing the relationship among assets, liabilities, and owner's equity
7. Accounting period cycle concept – changes in financial information are reported for a specific period of time in the form of financial statements
8. Accounting record – an organized summary of a business's financial activities
9. Accounting system – a planned process for providing financial information that will be useful to management
10. Adequate disclosure concept – financial statements that contain all information necessary to understand a business's financial condition
11. Adjusting entries – journal entries recorded to update general ledger accounts at the end of a fiscal period
12. Adjustments – changes recorded on a work sheet to update general ledger accounts at the end of the fiscal period
13. Assets – anything of value that is owned
14. Balance sheet – a financial statement that reports assets, liabilities, and owner's equity on a specific date.
15. Business entity concept – financial information is recorded and reported separately from the owner's personal financial information
16. Capital – the account used to summarize the owner's equity in a business
17. Chart of accounts – a list of accounts used by a business.
18. Closing entries – journal entries used to prepare temporary accounts for a new fiscal period
19. Consistent reporting concept – the same accounting procedures are followed in the same way in each accounting period
20. Correcting entry – a journal entry made to correct an error in a ledger
21. Credit – an entry to the right side of a T account
22. Debit – an amount entered on the left side of a T account
23. Equities – financial rights to the assets of a business
24. File maintenance – the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
25. Fiscal period – the length of time for which a business summarizes and reports financial information
26. General ledger – a ledger that contains all accounts needed to prepare financial statements
27. Going concern concept – financial statements are prepared with the expectation that a business will remain in operation indefinitely
28. Income statement – a financial statement showing the revenue and total expenses for a fiscal period
29. Ledger – a group of accounts
30. Liability – an amount owed by a business
31. Matching expenses with revenue concept – revenue from business activities and expenses associated with earning that revenue are recorded in
the same accounting period
32. Net income – the difference between total revenue and total expenses when total revenue is greater
33. Net loss – the difference between total revenue and total expenses when total expenses are greater
34. Objective evidence concept – a source document is prepared for each transaction
35. Opening an account – writing the account title and number on the heading of an account
36. Owner's equity – the amount remaining after the value of all liabilities subtracted from the value of all assets
37. Permanent accounts – accounts used to accumulate information from one fiscal period to the next
38. Post-closing trial balance – a trial balance prepared after the closing entries are posted
39. Posting – transferring information from a journal entry to a ledger account
40. Proprietorship – a business owned by one person
41. Temporary accounts – accounts used to accumulate information until it is transferred to the owner's capital account
42. Transaction – a business activity that changes assets, liabilities, or owner's equity
43. Trial balance – a proof of the equality of debits and credits in a general ledger
44. Work sheet – a columnar accounting form used to summarize the general ledger information needed to prepare financial statements