Ch 4 Completing The Accounting Cycle

Financial statements – A document with the bussiness profits and financial position for external parties
internal controls – policies and procedures, reduces opportunities for fraud
Buy on account – A common business practice in which business buy items and pay for them at a future date.
Post-closing trial balance – A trial balance prepared after the closing entries are posted
Main components of a Balance Sheet – Assets, Liabilities and OE
Account – a record summarizing all the information pertaining to a single item in the accounting equation
The directional term inferior means away from the head.
Maturity date – the date on which payment is due on a promissory note.
The only time the debit side of the revenue account is used is when you make – Closing entries
The directiоnаl term inferiоr meаns аway frоm the head.
Принцип реализации – Revenue realization principle

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