Chapter 6

fiscal period

the length of time for which a business summarizes and reports financial information

work sheet

a columnar accounting form used to summarize the general ledger information needed to prepare financial statements

trial balance

a proof of the equality of debits and credits in a general ledger

adjustments

changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period

balance sheet

a financial statement that reports assets, liabilities, and owner's equity on a specific date.

income statement

a financial statement showing the revenue and expenses for a fiscal period.

net income

the difference between total revenue and total expenses when total revenue is greater

net loss

the difference between total revenue and total expenses when total expenses are greater