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Trial Balance definitions

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Termini in questo insieme (15)

  • T Account
    Visual tool shaped like a 'T' used to organize and summarize all debits and credits for a specific account.
  • Debit
    Entry on the left side of a T account, typically increasing assets or expenses and decreasing liabilities or equity.
  • Credit
    Entry on the right side of a T account, usually increasing liabilities, equity, or revenue and decreasing assets.
  • Trial Balance
    List of all accounts and their final balances at a specific time, used to verify that total debits equal total credits.
  • Unadjusted Trial Balance
    Initial listing of account balances before any adjusting entries, serving as a starting point for financial statement preparation.
  • Adjusted Trial Balance
    Updated list of account balances after adjusting entries, ensuring accuracy before preparing financial statements.
  • Asset
    Resource owned by a business, such as cash, supplies, or land, expected to provide future economic benefit.
  • Liability
    Obligation or debt owed by a business to outsiders, such as accounts payable, requiring future payment.
  • Equity
    Owner's residual interest in the business after liabilities are subtracted from assets.
  • Revenue
    Income earned from normal business operations, increasing equity through sales or services provided.
  • Expense
    Cost incurred in the process of earning revenue, reducing equity in the business.
  • Common Stock
    Form of equity representing ownership shares issued to investors in exchange for capital.
  • Dividends
    Distributions of earnings to shareholders, reducing retained earnings and overall equity.
  • Accounts Payable
    Short-term liability representing amounts owed to suppliers for goods or services received on credit.
  • Accounts Receivable
    Asset representing amounts owed to the business by customers for goods or services delivered on credit.