Completing the Accounting Cycle

These flashcards cover key concepts and terminologies related to the accounting cycle, financial statements, and closing entries.

Accounting Cycle

The collective process of recording and processing the accounting events of a company.

Adjusted Trial Balance

A trial balance that includes all the adjustments made to the accounts.

Financial Statements

Formal records of the financial activities and position of a business, person, or entity.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

Income Statement

A financial statement that shows the revenues and expenses over a specific period.

Statement of Owner’s Equity

A financial statement that summarizes the changes in equity from transactions with the owner.

Balance Sheet

A financial statement that provides a snapshot of a company's assets, liabilities, and equity at a specific point in time.

Temporary Accounts

Accounts that are closed at the end of each accounting period and include revenues and expenses.

Permanent Accounts

Accounts that carry their balances into the next accounting period, such as assets, liabilities, and equity.

International Financial Reporting Standards (IFRS)

A set of accounting standards developed by an independent, not-for-profit organization that aims to create uniformity in financial reporting internationally.