ZIALE Accounting Principles and Financial Statements

Flashcards covering key concepts in accounting principles, financial statements, and accounting equation fundamentals.

What is the purpose of the Income Statement?

To show whether the business has made a profit or loss during a specified period.

What does the accounting equation state?

Assets = Liabilities + Capital.

What is double-entry bookkeeping?

A system where each transaction is recorded in at least two accounts, with debits equal to credits.

What are current liabilities?

Obligations that are due for repayment within one year, such as trade creditors and bank overdrafts.

Define accruals in accounting.

Expenses that have been incurred but not yet paid, which are recognized in the financial statements for the period they relate to.