Accounting Quiz #4

income statement/profit and loss statement/statement of operations/operating statement

a formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period

balance sheet/statement of financial position/statement of financial condition

a formal financing statement illustrating the assets, liabilities, and owner's equity of a business as of a specific date

fiscal period

a period of time covered by an income statement

work sheet

a sheet with a sufficient number of columns to provide for entering the trial balance, adjusting entries, profits and losses, and balance sheet times

income summary account/revenue and expense summary/income and expense summary

a special owner's equity account that is used only in the closing process to summarize results of the operation

adjusted trial balance

a trial balance taken after adjusting entries have been recorded.

post closing trial balance

a work paper prepared after all temporary owner's equity accounts have been closed and all permanent accounts have been balanced and ruled, proving the equality of the debits and credits.

adjusting entries

entries made at the end of a fiscal period to bring accounts up to date

closing entries

entries made at the end of each reporting period to transfer the balances of the temporary owner's equity accounts to the permanent owner's equity account and to reduce the balance in the temporary owner's equity accounts to zero in preparation for the next accounting period

net loss

the difference between gross profit and expenses when expenses are larger.

net income/net profit

the difference between gross profit and expenses when gross profit is larger