Principles Of Accounting - Chapter 4 Terms

Front 1

Account Form

Back 1

Balance sheet format that lists assets on the left of the report and liabilities and owner's equity on the right, just as those accounts appear in the accounting equation.

Front 2

Accounting Cycle

Back 2

The process of accounting for the transactions of a business for a period of time so that results of these transactions can be reported in financial statements.

Front 3

Classified Balance Sheet

Back 3

A balance sheet that separates its assets and liabilities into groups or classes, based on the relative liquidity of those items.

Front 4

Closing Entries

Back 4

Journal entries that complete the accounting cycle at the end of the accounting period; close the revenue, expense, and withdrawals accounts to set their balances to zero so that accounting can begin for the next period.

Front 5

Current Assets

Back 5

Assets that are expected to be converted to cash, sold, or consumed within one year or the business's operating cycle if the cycle is longer than a year.

Front 6

Current Liabilities

Back 6

Debts due to be paid with cash or fulfilled with goods and services within one year or the entry's operating cycle if the cycle is longer than a year.

Front 7

Fixed Assets

Back 7

The tangible, long-lived assets of a business including land, buildings, furniture, fixtures, and equipment. Also called plant assets and are commonly shown on the balance sheet as property, plant, and equipment.

Front 8

Income Summary

Back 8

A temporary account used to hold revenues and expenses during the closing process until their balances are transferred to capital.

Front 9

Long-Term Liabilities

Back 9

Liabilities other than those that are current.

Front 10

Operating Cycle

Back 10

The time span during which the business obtains resources, uses them to sell goods and services to customers, and collects cash from these customers.

Front 11

Permanent Accounts

Back 11

Accounts that are not closed at the end of the period - the asset, liability, and capital accounts.

Front 12

Plant Assets

Back 12

The tangible, long-lived assets of a business including land, buildings, furniture, fixtures, and equipment. Also called fixed assets and are commonly shown on the balance sheet as property, plant, and equipment.

Front 13

Post-Closing Trial Balance

Back 13

A list of the accounts and their balances at the end of the accounting period after closing entries have been journalized and posted.

Front 14

Property, Plant, and Equipment

Back 14

A heading often seen on the balance sheet used to describe fixed, or plant, assets.

Front 15

Report Form

Back 15

Balance sheet form that reports assets at the top of the report, followed by liabilities, and ending with owner's equity at the end of the report.

Front 16

Temporary Accounts

Back 16

Accounts that are closed at the end of the period - revenues, expenses, and withdrawals - that relate to a particular accounting period.