Acct 2101 - 8.31

Vocabulary flashcards covering foundational accounting concepts, financial statements, SEC forms, and debit/credit rules based on the lecture context.

Accounting Equation

The basic formula of accounting stating that total assets must equal total liabilities plus equity ($\text{Assets} = \text{Liabilities} + \text{Equity}$).

Income Statement

Also called the statement of operations, a financial statement that reports earnings generated over a period by deducting expenses from revenues to determine net income or net loss.

Balance Sheet

A financial statement that reports a company's financial position at a single point in time, reflecting its assets, liabilities, and stockholders' equity.

Statement of Retained Earnings

A financial report that shows how a company's cumulative earnings retained in the business change over specified periods of time.

Statement of Cash Flows

A financial statement that details the sources and uses of cash in a business during a specific period.

Accounts Receivable

An asset account representing amounts owed to a company by its customers for goods or services sold on credit or account.

Accounts Payable

A liability account representing amounts a company owes to its suppliers for goods or services purchased on credit.

Expanded Accounting Equation

The full expansion of equity within the accounting equation: $\text{Assets} = \text{Liabilities} + \text{Revenue} - \text{Expenses} - \text{Dividends}$.

Source Document

Original written or digital evidence (such as receipts, invoices, or payroll records) that proves an economic transaction occurred.

General Ledger

A master record in an accounting system that contains all individual accounts and their running balances.

Debit

An entry placed on the left side of a T-account or journal entry, used to increase asset, expense, and dividend accounts.

Credit

An entry placed on the right side of a T-account or journal entry, used to increase liability, equity, and revenue accounts.

T-Account

A visual tool shaped like a 'T' used to track historical debit (left) and credit (right) additions and subtractions for a single account.

Normal Balance

The side of an account (debit or credit) where increases are recorded and a positive balance is expected.

Journal Entry

A structured historical record of a financial transaction showing debited and credited accounts where total debits must equal total credits.

Accounting Cycle

The recurring sequence of accounting steps performed over a specific period, ending with closing the books and preparing financial statements.