Accounting 4.03-4.04 Vocabulary

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Adjusting Entries

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Journal entries recorded to update general ledger accounts at the end of the fiscal period

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Adjustments

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Changes recorded on a worksheet to update the general ledger accounts at the end of a fiscal period

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Balance Sheet

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Summarizes what a business owns, what a business owes, and the current net worth on a specific date

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Fiscal period

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The specific length of time (a month, a quarter, or a year) covered by the financial reports of a business

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Income Statement

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Reports net income or net loss financial information over a defined period of time

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Matching Principle

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A GAAP principle that requires matching expenses incurred in an accounting period with the revenue earned in the same period

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Merchandise Inventory

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Total of goods on hand for sale to customers

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Net Income

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

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Net Loss

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The difference between total revenue and total expenses when total expenses are greater than total revenue

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Ruling

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A single line drawn under a column to indicate that the amounts above the line are ready to be totaled

A double line drawn under a column to indicate that the amounts just above the ruling are totals and no other entries need to be made