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25 Cards in this Set
- Front
- Back
accounting equation
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an equation showing the relationship among assets, liabilities, and owner's equity
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accounting period cycle
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concept- changes in financial information are reported for a specific period of time in the form of financial statements
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adequate disclosure
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concept- financial statements contain all information necessary to understand a business's financial condition
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adjusting entries
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journal entries recorded to update general ledger accounts at the end of a fiscal period
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balance sheet
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a financial statement that reports assets, liabilities, and owner's equity on a specific date
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business entity
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concept- financial information is recorded and reported separately from the owner's personal financial information
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chart of accounts
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a list of accounts used by a business
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closing entries
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journal entries used to prepare temporary accounts for a new fiscal period
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consistent reporting
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concept- the same accounting procedures are followed in the same way in each accounting period
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Going concern
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concept- financial statements are prepared without the expectations that a business will remain in operation indefinitely
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Historical cost
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concept- the actual amount paid for merchandise or other items bought is recorded
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Matching expenses with revenue
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concept- revenue form business activities and expenses associated with earning that revenue are recorded in the same accounting period
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Objective evidence
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concept- a source document is prepared for each transaction
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Post-closing trial balance
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a trill balance prepared after the closing entries are posted
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posting
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transferring information from a journal entry to a ledger account
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proprietorship
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a business owned by one person
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realization of revenue
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concept- revenue is recorded at the time goods or serves are sold
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revenue
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an increase in owner's equity resulting form the operation of a business
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service business
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a business that performs an activity for a fee
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source document
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a business paper from which information is obtained for a journal entry
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T account
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an accounting device used to analyze transactions
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temporary accounts
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accounts used to accumulate information until it is transferred to the owner's capital account
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trial balance
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a proof of the equality of debits and credits in a general ledger
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Unit of Measurement
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concept- business transactions are stated in numbers that have common values
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work sheet
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a columnar accounting form used to summarize the general ledger information needed to prepare financial statements
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