Term
| Statement of Owner's Equity |
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Definition
Prepared 2nd.
Beginning capital amount + Owner Investments + Net income - Owner Withdrawals = Ending Capital Amount.
Ending capital amount is transferred to the balance sheet. |
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Term
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Definition
Prepared 3rd.
Lists all assets, liabilities and equity.
Shows total assets = liabilities + equity. |
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Term
| Accounting Process (steps) |
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Definition
1. Record transactions in the journal.
2. Move entries to t-accounts.
3. Post to the ledger.
4. Prepare the trial balance.
End of Month
5. Journalize adjusting entries.
6. Move adjusting entries to t-accounts.
7. Add adjusting entries to the trial balance. |
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Term
Financial Statements
Order of Preparation |
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Definition
1. Income Statement
2. Statement of Owner's Equity
3. Balance Sheet
4. Cash flow Statement |
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Term
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Definition
1) 0 out revenue accounts by using the Income summary account, credit side.
2) 0 out expense accounts by using the Income summary account, debit side.
3) 0 out the Income summary account to the Capital account (profit or loss as appropriate).
4) 0 out the withdrawals account via the Capital account, debit side. |
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Term
| Income Statement (definition) |
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Definition
- Prepared first.
- Lists revenues and expenses.
- Revenues - expenses = Net income.
Shows a company's results of operations or earnings for various periods of time. |
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