Cht 7 & 8 accounting

Accounting cycle

The series of accounting activities included in recording financial information for a fiscal period.

Closing entries

Journal entries used to prepare temporary accounts for a new fiscal period.

Financial accounting

The area of accounting which focuses on reporting information to external users.

Financial ratio

A comparison between two components of financial information

managerial accounting

The area of accounting that focuses on reporting information to internal users.

permanent accounts

Accounts used to accumulate information from one fiscal period to the next.

post-closing trial balance

A trial balance prepared after the closing entries are posted.

Ratio analysis

The calculation and interpretation of a financial ratio.

return on sales (ROS)

The ratio of net income to total sales.

temporary accounts

Accounts used to accumulate information until it is transferred to the owner's capital account.

vertical analysis

Reporting an amount on a financial statement as a percentage of another item on the same financial statement.