Accounting

Proprietorship

A business owned by one person

Trial Balance

A list of all accounts and their balances to prove debits equal credits

General Ledger

A record containing all accounts and their transaction history

Liability

Amounts owed by a business; debts

Chart of Accounts

A numbered list of all accounts used by a business

Source Document

A paper that proves a transaction occurred

Fiscal Period

The length of time covered by financial statements

Posting

Transferring information from the journal to the ledger.

T-Account

A tool showing debits on the left and credits on the right

Adjusting Entries

Entries made at the end of a fiscal period to update accounts

Income Statement

A report showing revenue, expenses, and net income or loss

Net Income

Revenue minus expenses when revenue is greater

Asset

Anything of value owned

Service Bussines

A business that provides services instead of goods

Balance Sheet

A report showing assets, liabilities, and owner’s equity

Objective evidence

A transaction must be supported by a source document

Accounting Equation

Assets = Liabilities + Owner’s Equity

Matching Revenue With Expenses

Expenses must be recorded in the same period as the revenue they help earn

Worksheet

A form used to summarize financial information

Revenue

Income earned from sales or services

Double Entry Accounting

Every transaction affects at least two accounts

Net Loss

Expenses exceed revenue

File Maintenance

Keeping accounts organized and up‑to‑date

Equities

Financial rights to assets