(See related pages)
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| Capital assets | Long-lived assets used to produce or sell products and services and consist of tangible assets called property, plant and equipment, and intangible capital assets. (See page(s) 218) |
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| Classified balance sheet | A balance sheet that presents the assets and liabilities in relevant subgroups. (See page(s) 216) |
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| Closing entries | Journal entries recorded at the end of each accounting period that transfer the end-of-period balances in revenue, expense, and withdrawals accounts to the permanent owner's capital account in order to prepare for the upcoming period and update the owner's capital account for the events of the period just finished. (See page(s) 207) |
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| Closing process | A step at the end of the accounting period that prepares accounts for recording the transactions of the next period. (See page(s) 206) |
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| Current assets | Cash or other assets that are expected to be sold, collected, or used within the longer of one year or the company's operating cycle. (See page(s) 218) |
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| Current liabilities | Obligations due to be paid or settled within the longer of one year or the operating cycle. (See page(s) 219) |
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| Current ratio | A ratio that is used to evaluate a company's ability to pay its short-term obligations, calculated by dividing current assets by current liabilities. (See page(s) 225) |
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| Income Summary | A temporary account used only in the closing process to which the balances of revenue and expense accounts are transferred; its balance equals net income or net loss and is transferred to the owner's capital account. (See page(s) 207) |
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| Intangible capital assets | Long-lived capital assets that lack physical form and are used to produce or sell products or services. Goodwill is an intangible asset but it is not a capital asset. (See page(s) 218) |
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| Liquid assets | Assets that can easily be converted to cash or used to pay for services or obligations; cash is the most liquid asset. (See page(s) 225) |
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| Liquidity | The ability to pay day-to-day obligations (current liabilities) with existing liquid assets. (See page(s) 225) |
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| Long-term investments | Assets not used in day-to-day operating activities that are held for more than one year or the operating cycle such as a long-term note receivable. (See page(s) 218) |
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| Long-term liabilities | Obligations that are not due to be paid within the longer of one year or the operating cycle. (See page(s) 219) |
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| Nominal accounts | See temporary accounts. (See page(s) 206) |
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| Operating cycle | For a business, the average time between paying cash for employee salaries or merchandise and receiving cash from customers. (See page(s) 216) |
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| Owner's equity | The owner's claim on the assets of a company. (See page(s) 219) |
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| Permanent accounts | Accounts that are used to report on activities related to one or more future accounting periods; their balances are carried into the next period, and include all balance sheet accounts; permanent account balances are not closed as long as the company continues to own the assets, owe the liabilities, and have owner's equity; also called real accounts. (See page(s) 206) |
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| Post-closing trial balance | A list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted; a list of balances for all accounts not closed. (See page(s) 211) |
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| PPE | See property, plant and equipment. (See page(s) 218) |
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| Pro forma statements | Statements that show the effects of the proposed transactions as if the transactions had already occurred. (See page(s) 203) |
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| Property, plant and equipment (PPE) | Long-lived tangible capital assets used to produce or sell products and services; abbreviated PPE. (See page(s) 218) |
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| Real accounts | See permanent accounts. (See page(s) 206) |
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| Reversing entries | Optional entries recorded at the beginning of a new period that prepare the accounts for simplified journal entries subsequent to accrual adjusting entries. (See page(s) 223) |
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| Temporary accounts | Accounts that are used to describe revenues, expenses, and owner's withdrawals for one accounting period; they are closed at the end of the reporting period; also called nominal accounts. (See page(s) 206) |
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| Unclassified balance sheet | A balance sheet that broadly groups the assets, liabilities, and owner's equity. (See page(s) 216) |
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| Work sheet | A 10-column spreadsheet used to draft a company's unadjusted trial balance, adjusting entries, adjusted trial balance, and financial statements; an optional step in the accounting process. (See page(s) 200) |
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| Working papers | Internal documents that are used to assist the preparers in doing the analyses and organizing the information for reports to be presented to internal and external decision makers. (See page(s) 200) |