Intermediate Accounting Ch 3

Happening of consequence. the source or cause of changes in assets, liabilities and equity. may be external or internal

External event involving transfer or exchange between 2 or more entities

Asset, liability and equity accounts; appear on the balance sheet; never closed

Temperary accounts are revenue, expense, and dividend accounts; except for dividends appear on income statement; periodically closed

Book containing accounts
general is collection of all asset, liability, owner equity, revenue and expense accounts
subsidiary contains all the details related to a given general ledger account

"book of original entry" where company initially records transactions and selected other events
amounts are transferred from this to the ledger

Process of transferring the essentail facts and figures from journal to ledger accounts

List of all open accounts in ledger and their balances immediately
taken after all adjustments have been posted is called adjusted trail balance
lists accounts and their balances at a given time

Entries made at end of accounting period to bring all accounts up to date on an accrual basis, so that the company can prepare correct financial statements

Statements that reflect the collection, tabulation, and final summarization of account data

Shows the financial condition of the enterprise at then end of a period

Measures the results of operations during the period

Reports cash provided and used by operating, investing & financial activities during the period

Reconciles the balance of the retained earnings account from the beginning to the end of the period

Formal process by which enterprise reduces all nominal accounts to zero and determines and transfers the net income or net loss to an owners equity account also known as clsoing the ledger, closing the books or merely closing