Flashcards in Unit 4/5 Deck (22)
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1
net loss
when expenses are greater than revenue
2
fiscal period
an accounting period that is one year in length
3
owner's drawing account
records the withdrawal of assets from the business by the owner
ex. owner's salary
4
matching principle
costs and the sponsors should be matched with the revenue they help generate during the same accounting period
5
prepare a report form balance sheet
y
6
income statement
a financial statement that presents revenue, expenses, and net income (or net loss) for a specific period of time
7
expenses
costs of items or services used up in the operation of a business
8
net loss ____________ owner's equity
decreases
9
for the _______ ended _______
for income statement heading
10
net income ________ owner's equity
increases
11
revenue recognition principle
states that revenue is recognized at the time the revenue is earned (even if cash is not received)
12
assets increase on the ______ side and decrease in the _______ side
debit
credit
13
revenue
amounts earned from the sale of goods or services during the operation of a business
14
time period principle
requires the definition and use of the same period of time for each accounting period
15
fiscal year
the twelve month period from January 1 to December 31
16
liabilities and capital increase on the ________ side and decrease on the _______ side
credit
debit
17
accounting period
the period of time covered by the financial statement
18
accrual basis of accounting
when a business records revenue when earned and expenses when incurred
19
the balance sheet
a statement the presents the assets, liabilities, and owner's equity
20
net income
when revenue is greater than expenses
21
prepare an income statement
y
22