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Bookkeeping
| Term | Definition |
|---|---|
| BOOKKEEPER | A person in charge of keeping the financial records of an organization |
| BOOKKEEPING | The process of recording business transactions |
| BALANCE SHEET | Financial statement that reports a business’ assets, liabilities & owner’s equity on a specific date |
| OWNER’S EQUITY | The value remaining in the business when liabilities are deducted from assets (part of the business that belongs to them) |
| LIABILITY | Anything owed by a business |
| ASSET | Anything of value owned or used by a business Examples: cash, property, vehicles, supplies, cash, equivalent, pre-paid Insurance, inventory, buildings, accounts receivable |
| ACCOUNTING EQUATION | Assets = Liabilities + Owner’s Equity |
| CREDIT | An entry recording an amount, listed on the right side or column of an account |
| DEBIT | An entry recording an amount, listed on the left side or column of an amount |
| PERMANENT ACCOUNT | Balance sheet accounts that retain an account balance from one accounting period to the next |
| CONTRA ACCOUNT | An account that shows the estimated decrease in the value of the account to which it relates; also referred to as a “minus” or “valuation” account |
| BALANCE SIDE, ACCOUNT (BAL) | The difference between the total debits and total credits in an account; all accounts have a “normal” balance |
| CHART OF ACCOUNTS | A listing of the names of the accounts that a company has identified and made available for recording transactions in its general ledger |
| T-ACCOUNT | A tool thats used to help understand individual ledger accounts and the effects of each transaction; a T-account is a way to organize & summarize transactions in an individual ledger |
| GENERAL LEDGER | A record of the transactions of a business, arranged by an individual account |
| TEMPORARY ACCOUNT | Income statement accounts that are intended to accumulate data for one accounting period only, their account balances are periodically transferred to the owner’s equity account |
| PRE-PAID INSURANCE | An asset account that keeps track of insurance values paid for but not yet received |
| POSTING REFERENCE | A field that facilitates cross-reference or interlinking between the journal and the ledger in the posting process |
| DIVISION | A method of categorizing accounts for easier reference |
| ACCOUNT | A record pertaining to a single item in the accounting equation that summarizes all the information about the money available in the business |
| CAPITAL ACCOUNT | The account used to summarize owner’s equity |
| ACCOUNT TITLE | The name given to each account |
| SOURCE DOCUMENT | Business paper, proof that the transaction took place Examples: check, calculator tapes, receipts & memorandums |
| CREDITOR | An entity or person who has lent money |
| DEBTOR | An entity or person who owes money |
| ACCOUNTS PAYABLE | A liability account recording that money is or will be owed |
| SERVICE BUSINESS | A business that performs a service for a fee (in exchange for payment) |
| GENERAL JOURNAL | Keeps chronological record of the daily transactions of a business |
| ACCOUNT BALANCE | The amount in each account |
| TRANSACTION | Any activity that occurs in the business that changes part of the accounting equation (Assets, liabilities or owners equity) |
| ACCOUNTING | The art of recording, classifying and summarizing in a significant manner and in terms of money, transactions, events which are of financial character and interpreting the results |
| ORIGINAL ENTRY | The transaction which is the first when starting a business |
| JOURNAL | A book in which original transactions of the business are first recorded; its sometimes called the book of original entry |
| FOOTING (Foot and Balance) | Marking the total of a column in small writing beneath the last figure in that column |
Created by:
Audi1175
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