Accounting 1 - Chapter 6

Reporting income when it is earned and expenses when they are incurred.

• accrual basis of accounting

• cash basis of accounting

A fiscal period consisting of 12 consecutive months

• fiscal period

• fiscal year

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

• adjusting entries

• adjustments

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

• balance sheet

• income statement

• trial balance

• work sheet

The difference between total revenue and total expenses when total revenue is greater.

• net income

• net loss

A financial statement that reports the value of a business's assets, liabilities, and owner's equity on a specific date.

• balance sheet

• income statement

• trial balance

• work sheet

The length of time for which a business summarizes financial information and reports its financial performance.

• fiscal period

• fiscal year

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

• net income

• net loss

Reporting income when the cash is received and expenses when the cash is paid.

• accrual basis of accounting

• cash basis of accounting

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

• balance sheet

• income statement

• trial balance

• work sheet