Unit 6

Question 1

fiscal period

Answer 1

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

Question 2

fiscal year

Answer 2

A fiscal period consisting of 12 consecutive months.

Question 3

work sheet

Answer 3

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.

Question 4

trial balance

Answer 4

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

Question 5

prepaid expense

Answer 5

Cash paid for an expense in one fiscal period that is not used until a later period.

Question 6

accrual basis of accounting

Answer 6

Reporting income when earned and expenses when incurred.

Question 7

cash basis of accounting

Answer 7

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

Question 8

adjustments

Answer 8

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

Question 9

balance sheet

Answer 9

A financial statement that reports assets, liabilities, and owner’s equity on a specific date.

Question 10

income statement

Answer 10

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

Question 11

adjusting entries

Answer 11

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

Question 12

certified public accountant (CPA)

Answer 12

An accountant who has passed the uniform certified public accounting exam and met the licensing requirement for a state.