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BK Terms #4
| Term | Definition |
|---|---|
| Revenue - Net Sales | Total amount of revenue from sale of goods or services. |
| Revenue Recognition Priniple | A business recognizes its revenues when the goods or services are provided to the customer, regardless of when the payment is received. |
| Revenue - Sales Revenue | Revenue from the sale of goods or services. |
| Revenue - Service Revenue | Revenue from the sale of services. |
| Reverse Transactions | Transactions that you entered "backward." For example, entering a deposit as a withdrawal. |
| Rounding Error | Numbers were rounded that shouldn't be. |
| S Corp | A business structure that is owned by no more than 100 shareholders (all must be US citizens) and must maintain a board of directors, but owners do not carry any personal liability. |
| Salaries Payable | Employee wages before taxes and other deductions are withheld, that have not yet been paid. |
| Sales Order | When a business receives a purchase order from a customer, it creates a sales order document. |
| Sales Receipt | A Sales Receipt is a receipt given by the seller to the buyer when making a purchase. It ensures both parties agree on the sold items and payment amount. Sales receipts are needed for tax purposes, inventory tracking, and customers’ refunds or accounting. |
| Sales Tax Payable | A liability account in the balance sheet that keeps track of the sales tax collected from the customers that will later be paid to the government. |
| Sales Transactions | Sales Transactions generate revenue for a business from the sale of goods and services. |
| Service Life | The useful life of an asset, also known as economic life or service life, is an estimate of how long you can reasonably expect to use an asset for your business. |
| Shareholder Equity | The dollar amount that would be returned to shareholders if the business were liquidated and all outstanding debts were paid. |
| Shareholders | Individuals or entities that own the business, which come with certain rights and responsibilities. This type of ownership allows them to reap the benefits of a business's success. |
| Short-Term (Current) Assets | Short Term, or Current, Assets can be converted into cash quickly (within a year). |
| Sole Proprietorship | A business structure that is owned solely by one person who takes on unlimited personal liability. |
| Solvency | This measures a business's ability to pay long term debt. |
| Source Documents | Source documents are original records showing specific transactions. They should include business or person names, a reference number, transaction details (date, description, amount due), and the signer if applicable. |
| State Disabilities Insurance (SDI) | A payroll tax in some states to fund employees financially if they are injured on the |
| State Unemployment Tax Act (SUTA) | Employer paid tax that funds state-administered unemployment programs (only employer pays). |
| Statement of Cash Flows (or Cash Flow Statement) | Reports the sources and uses of cash by a business. |
| Statement of (Owner's) Equity | Reports the changes in business equity, from the opening balance to the end of the period balance. |
| T-account | A chart in which debits are on the left and credits are reported on the right. |
| Taxable Wages | Earning from which an employer must withhold taxes and does not include non-taxable wages such as employee contributions to a health savings account. |
| Term | The term is the number of years the business will pay on its loan before receiving full ownership of the asset. |
| Total Operationg Expenses | Other expenses that go into running a business such as payroll, rent, utilities. |
| Transaction Journal (for journal) | Where the detail of an individual event (transaction) is shown, making it easier than searching through General Ledger. |
| Transactional Reconciliation | Compare the books line by line to another source document to make sure that every transaction syncs up and is accounted for. |
| Transactions | An individual event, such as expenses or revenue. |
| Unadjusted Trial Balance | A form or statement that lists the titles and balances of all ledger accounts at a given date before adjusting entries are made. |
| Unrealized Gains | The theoretical profit that a business will receive when they sell a stock, commodity, or make a currency exchange. |
| Variance Analysis | The practice of evaluating the difference between budgeted costs and actual costs within your business. |
| Vendor | An entity that the business purchases products or services from, sometimes for resell or for companies use, also known as a supplier. |
| Vertical Analysis | Proportional analysis of a Financial Statement within a single point of time. |
| Wage Garnishment | A legal procedure in which a person's earnings are required by court order to be withheld by an employer for the payment of a debt such as child support. |
| Work In Progress | Also known as goods-in-process represents raw materials in the process of being transformed into a finished product. |
| Working Capital Loan | A loan used to finance a business's daily operations. |
| Year to Date (YTD) | YTD is a cumulative measure of financial transactions since the start of the year, including taxes, deductions, and accrued pay. |
Created by:
noodlee