Accounting 1

trial balance

A report that lists the balances of all general ledger accounts of a company at a point of time

general ledger

is a record of all past transactions of a company, organized by accounts.

liability

A business’s financial obligation or debt owned to an outside party.

Chart Of Accounts

An index of all the financial accounts available for use in a company’s general ledger

source document

a piece of paper that proves that a transaction has occurred

fiscal period

he time between the day your business starts its business year and the day it ends its business year

Posting

moving financial data from journals to the general ledger, making sure all transactions are accurately recorded

T account

An informal term for a set of financial records that uses double-entry bookkeep

adjusting entries

income statement

a financial statement that lays out a company's revenue, expenses, gains, and losses during a set accounting period

Net Income

Revenue-expenses. Total income after expenses

asset

Something a business owns

service business

type of business that provides intangible services like expertise, labor, or experiences, rather than physical goods

balance sheet

a statement of a business's assets, liabilities, and owner's equity as of any given date

objective evidence

Evidence with unbiased data like invoices, bank statements etc…

accounting equation

A=OE+L

matching revenue with expenses

Says expenses should be recorded in the same period as revenue

work sheet

a spreadsheet used to prepare accounting information and reports.

revenue

Amount of money made from sales

double entry accounting

records two sides, known as debit and credit, following the principle that for every debit there must be an equal and opposite credit

net loss

More money lost than made.