Accounting Ch 6 Questions and Graded Answers.
Accrual basis of accounting - Reporting income when it is earned and expenses when they
are incurred
Adjusting Entries - Journal entries recorded to update general ledger accounts at the end
of fiscal period
Adjustments - Changes recorded on a work sheet to update general ledger accounts at the
end of a fiscal period
Balance Sheet - A financial statement that reports assets, liabilities, and owner's equity on
a specfic date
Cash basis of accounting - Reporting income when the cash is received and expenses
when the cash is paid
Fiscal Period - The length of time for which a business summarizes its financial
information and reports its financial performance
Fiscal Year - A fiscal period consisting of 12 consecutive months
Income Statement - A financial statement showing the revenue and expenses for a fiscal
period
Net Income - The difference between total revenue and total expenses when total revenue
is greater
Net Loss - The difference between total revenue and total expenses when total expenses
are greater
Accrual basis of accounting - Reporting income when it is earned and expenses when they
are incurred
Adjusting Entries - Journal entries recorded to update general ledger accounts at the end
of fiscal period
Adjustments - Changes recorded on a work sheet to update general ledger accounts at the
end of a fiscal period
Balance Sheet - A financial statement that reports assets, liabilities, and owner's equity on
a specfic date
Cash basis of accounting - Reporting income when the cash is received and expenses
when the cash is paid
Fiscal Period - The length of time for which a business summarizes its financial
information and reports its financial performance
Fiscal Year - A fiscal period consisting of 12 consecutive months
Income Statement - A financial statement showing the revenue and expenses for a fiscal
period
Net Income - The difference between total revenue and total expenses when total revenue
is greater
Net Loss - The difference between total revenue and total expenses when total expenses
are greater
