Question: accrual basis of accounting

Answer: reporting income when it is earned and expenses when they are incurred

Question: adjusted trial balance

Answer: a trial balance prepared after adjusting entries are posted

Question: adjusting entries

Answer: journal entries recorded to update general ledger accounts at the end of a fiscal period

Question: adjustments

Answer: changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period

Question: balance sheet

Answer: a financial statement that reports assets, liabilities, and owner's equity on a specific date

Question: cash basis of accounting

Answer: reporting income when the cash is received and expenses when the cash is paid

Question: Certified Public Accountant (CPA)

Answer: an accountant who has passed the uniform certified public accounting exam and met the licensing requirement for a state

Question: fiscal period/accounting period

Answer: the length of time for which a business summarizes its financial information and reports its financial performance

Question: fiscal year

Answer: a fiscal period consisting of 12 consecutive months

Question: income statement

Answer: a financial statement showing the revenue and expenses for a fiscal period

Question: net income

Answer: the difference between total revenue and total expenses when total revenue is greater

Question: net loss

Answer: the difference between total revenue and total expenses when total are greater

Question: prepaid expense

Answer: cash paid for an expense in one fiscal period that is not used until a later period

Question: trial balance

Answer: a proof of equality of debits and credits in a general ledger

Question: work sheet

Answer: a columnar accounting form used to summarize the general ledger information needed to prepare financial statements

Question: What is the accounting concept?What does it mean?

Answer: consistent reportingthe same accounting principles must be followed in the same way in each accounting period

Question: What do you do first on a work sheet?

Answer: You put on the three lines: company name, work sheet, and for month ended (month, date, & year)

Question: What are the next steps for a work sheet?

Answer: List the account titles in the order they give you. Put the amounts they give you in trial balance. Then, you add the adjustments by subtracting and putting letters to number the amounts (a or b). You put the first numbers both in credit and then both in debit. Then, everything below the income summary should be brought into the column of income statement as debit or credit. Then, you put numbers in the balance sheet account above the income summary. Finally, you find the net income and totals for each columns.

Question: Net loss is entered in the work's sheet ..

Answer: Income Statement/ Balance Sheet

Question: Total revenue is greater than total expenses, difference is a ..

Answer: net income

Question: Worksheet balance of an expense account is extended to the ..

Answer: Income Statement column Debit

Question: Worksheet, balance of the Sales account is extended to the ..

Answer: Income Statement Credit

Question: Worksheet, balance of the owner's capital account is extended to the ..

Answer: Balance Sheet Credit

Question: Columnar form used to summarize general ledger info

Answer: work sheet

Question: On a trial balance,

Answer: all general ledger account titles are listed

Question: Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period

Answer: adjustments