Accounting Chapter 6 Study Guide – Flashcards
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Cash basis of accounting
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Reporting income when the cash is received and expenses when the cash is paid.
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Work sheet
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A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
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Adjusting entries
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Journal entries recorded to update general ledger accounts at the end of a fiscal period.
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Prepaid expense
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Cash paid for an expense in one fiscal period that is not used until a later period.
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Income statement
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A financial statement showing the revenue and expenses for a fiscal period.
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Net loss
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The difference between total revenue and total expenses when total expenses are greater.
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Balance sheet
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A financial statement that reports the value of a business's assets, liabilities, and owner's equity on a specific date.
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Trial balance
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A proof of the equality of debits and credits in a general ledger.
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Fiscal year
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A fiscal period consisting of 12 consecutive months.
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