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16 Cards in this Set
- Front
- Back
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net income
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the amount by which total revenue exceeds total expenses for the acoounting period
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balance sheet
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a report of the balances in the permanent accounts on a specific date
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financial statements
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reports prepared to summerized the changes resulting from business transaction that occur during an accounting the period
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balance sheet section
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lists all the permanent accounts
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checking account
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an account that allows a person or buisness to deposit cash in a bank and then write checks and make ATM withdrawals and purchases against the account balance
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income summary
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the general ledger account used to summerize the revenue and expenses for the period
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closing entries
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journal entries made to close, or reduce to zero, the balances in the temporary accounts and to transfer the net income or net loss for the period of the capital account
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compound entry
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a journal entry with two or more debits or two or more credits
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ratio analysis
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the process of eveluating the relationship between various amounts in the financial statements
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income statement
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a report of the net income or net loss for a specific period
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statement of changes in owners equity
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a financial statement the summerizes changes in the owners capital account as a result of business transactions during the period
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matching principle
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principle requiring that the expenses incurred in an accounting period are matched with revenue earned in the same period
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net loss
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the amount by which total expenses exceed total revenue for the accounting period
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post closing trial balance
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a list of the permanent general ledger account balances; it prepared to prove the the ledger after the closing entries are posted
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ruling
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drawing a line to signal that the entries above the rule are to be added or subtracted
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return on sales
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the ratio the examines the portion of each sales dollar the represents profit; calculated by dividing net income by sales
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