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accounting dictionary

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Accounting
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A
Account a record summarizing all the information pertaining to a single item in the accounting
Equation
Account balance the amount in an account
Account number the number assigned to an account
Account title the name given to an account
Accounting planning, recording, analyzing, and interpreting financial information
Accounting cycle the series of accounting activities included in recording financial
Information for a fiscal period
Accounting equation an equation showing the relationship among assets, liabilities, and
Owner’s equity
Accounting period see Fiscal period
Accounting records organized summaries of a business’s financial activities
Accounting system a planned process for providing financial information that will be useful to
Management
Accounts expenses incurred in one fiscal period but not paid until a later fiscal
Period
Accounts payable ledger a subsidiary ledger containing only accounts for vendors from
Whom items are purchased or bought on account
Accounts receivable ledger a subsidiary ledger containing only accounts for charge
Customers
Accounts receivable turnover ratio the number of times the average amount of accounts
Receivable is collected during a specified period
Accrual basis of accounting the accounting method that records revenues when they are
Earned and expenses when they are incurred
Accrued expenses incurred in one fiscal period but not paid until a later fiscal
Period
Accrued interest expense interest incurred but not yet paid
Accrued interest income interest earned but not yet received
Accrued revenue earned in one fiscal period but not received until a later fiscal
Period
Accumulated depreciation the total amount of depreciation expense that has been recorded
Since the purchase of a plant asset
Acid-test ratio a ratio that shows the numeric relationship of quick assets to current liabilities
Adjusting entries journal entries recorded to update general ledger accounts at the end of a
Fiscal period
Adjustments changes recorded on a work sheet to update general ledger accounts at the
End of a fiscal period
Administrative expenses budget schedule a statement that shows the projected expenses
For all operating expenses not directly related to selling operations
Aging accounts receivable analyzing accounts receivable according to when they are due
Allowance method of recording losses from uncollectible accounts crediting the
Estimated value of uncollectible accounts to a contra account
Amortization recognizing a portion of an expense in each of several years
ACCOUNTING DICTIONARY 2
Appropriations authorizations to make expenditures for specified purposes
Articles of incorporation a written application requesting permission to form a corporation
Assessed value the value of an asset determined by tax authorities for the purpose of
Calculating taxes
Asset anything of value that is owned
Auditing the independent reviewing and issuing of an opinion on the reliability of accounting
Records
Auditor a person who examines the records that supports the financial records of a business to
Assure that generally accepted accounting principles (GAAP) are being followed
Automatic check deposit depositing payroll checks directly to an employee’s checking or

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Savings account in a specific bank
Average number of days’ sales in merchandise inventory the period of time needed to sell
An average amount of merchandise inventory
B
Bad debts see Uncollectible accounts
Balance sheet a financial statement that reports assets, liabilities, and owner’s equity on a
Specific date
Bank statement a report of deposits, withdrawals, and bank balances sent to a depositor by a
Bank
Bill of exchange sees Draft
Bill of lading a receipt signed by the authorized agent of a transportation company for
Merchandise received that also serves as a contract for the delivery of the merchandise
Blank endorsement an endorsement consisting only of the endorser’s signature
Board of directors a group of persons elected by the stockholders to manage a corporation
Bond a printed, long-term promise to pay a specified amount on a specific date and to pay
Interest at stated intervals
Bond issue all the bonds representing the total amount of a loan
Bond sinking fund an amount set aside to pay a bond issue when due
Book inventory see perpetual inventory
Book value the difference between an asset’s account balance and its related contra account
Balance
Book value of a plant asset the original cost of a plant asset minus accumulated
Depreciation
Book value of accounts receivable the difference between the balances of Accounts
Receivable and its contra account, Allowance for Uncollectible Accounts
Book value per share sees Equity per share
Breakeven point the amount of sales at which net sales is exactly the same as total costs
Budget a written financial plan of a business for a specific period of time, expressed in dollars
Budget period the length of time covered by a budget
Budgeted income statement a statement that shows a company’s projected sales, costs,
Expenses and net income
Budgeting planning the financial operations of a business
ACCOUNTING DICTIONARY 3
C
Capital the account used to summarize the owner’s equity in a business
Capital stock total shares of ownership in a corporation
Cash basis of accounting the accounting method that records revenues when they are
Received and expenses when they are paid
Cash budget a statement that shows for each month or quarter a projection of a company’s
Beginning cash balance, cash receipts, cash payments, and ending cash balance
Cash discount a deduction from the invoice amount, allowed by a vendor to encourage early
Payment
Cash flows the cash receipts and cash payments of a company
Cash over a petty cash on hand amount that is more than a recorded amount
Cash payments budget schedule projected cash payments
Cash payments journal a special journal used to record only cash payment transactions
Cash receipts budget schedule projected cash receipts
Cash receipts journal a special journal used to record only cash receipt transactions
Cash sale a sale in which cash is received for the total amount of the sale at the time of the
Transaction
Cash short petty cash on hand amount that is less than a recorded amount
Certificate of deposit a document issued by a bank as evidence of money invested with the
Bank
Charge sale see Sale on account
Chart of accounts a list of accounts used by a business

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A Account a record summarizing all the information pertaining to a single item in the accounting Equation Account balance the amount in an account Account number the number assigned to an account Account title the name given to an account Accounting planning, recording, analyzing, and interpreting financial information Accounting cycle the series of accounting activities included in recording financial Information for a fiscal period Accounting equation an equation showing the relationship among assets, liabilities, and Owner’s equity Accounting period see Fiscal period Accounting records organized summaries of a business’s financial activities Accounting system a planned process for providing financial information that will be useful to Management Accounts expenses incurred in one fiscal period but not paid until a later fiscal Period Accounts payable ledger a subsidiary ledger containing only accounts for vendors from Whom items are purchased or bought on account Accounts receivable ledger a subsidiary ledger containing only accounts for charge Customers Accounts receivable turnover ratio the number of times the average amount of accounts Receivable is collected during a specified period Accrual basis of accounting the accounting method that records revenues when they are Earned and expenses when they are incurred Accrued expenses incurred in one fiscal period but not paid until a later fiscal Period Accrued interest expense interest incur ...
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