Income statement

An income statement is a financial statement that reports a company's financial performance

over a specific accounting period. Financial performance is assessed by giving a summary of
how the business incurs its revenues and expenses through both operating and non-operating
activities.

What is a balance sheet

A statement of the assets, liabilities, and capital of a business or other organization at a

particular point in time, detailing the balance of income and expenditure over the preceding
period.

What is General Journal

General Journal Entries. The journal is the point of entry of business transactions into the
accounting system. It is a chronological record of the transactions, showing an explanation of
each transaction, the accounts affected, whether those accounts are increased or decreased,
and by what amount.

What is General ledger

A general ledger (GL) is a chronological accounting record a business uses to keep track of
financial transactions. Transactions are categorized and summarized into general
ledger accounts. An account is a unique record for each type of asset, liability, equity, revenue
and expense.

A general ledger account is an account or record used to sort and store balance sheet and
income statement transactions. Examples of general ledger accounts include the
asset accounts such as Cash, Accounts Receivable, Inventory, Investments, Land, and
Equipment.

Five major categories in which accounts are divided:

(1) Assets,

(2) Liabilities,

(3) Net assets,

(4) Revenue, and

(5) Expenditure. These accounts are generally further divided into groups and sub-groups within
each class.
True or False:

1. T

2. T

3. F

4. F

5. F