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A device for recording the changes ( increases or Decreases) in the fundamental accounting elements


one who is concerned with the design of the system of records, the preparation of reports based upon the recorded data and the interpertation of the reports

Account balance

The difference between the total debits and the total credits in an account


a language of business employed to communicate financial information based upon analyzing, recording, classification, summerization, reporting,and interpertation of financial data.

Accounting equation

Assets = Liabilities + Owners Equity

Accounting cycle

The process involved in journalizing, posting to the ledger taking a trial balance, preparing statements, making adjusting and closing entries, and preparing a post closing trial balance

Accounts payable

An unwritten promise to pay creditors for property , such as merchandise, supplies, or equipment, purchased on credit, or for services recieved on credit

Accounts Receivable

and un written promise by a costumer to pay, at a later date, for goods sold or services rendered

Accounts Receivable turnover

measures how many times per year receivables are collected.

Accrued Accounting

Recording in each fiscal period applicable expenses, wether paid or not, and income earned, wether collected or not

Accrude expense

An expense incurred in operating a business during an accounting period but not yet paid

Accrued Income

Income actually earned during an accounting period but which will not be recieved until a future period


Quick assets divided by current liabilities

Activity analysis

measures how efficiently a firm is utilizing its assets

Adjusted trial balance

A trial balance taken after adjusting entries have been recorded

Adjusting Entries

Entries made at the conclusion of a fiscal period to bring accounts up to date

Age of accounts receivable

measures the average time required to collect recievables. CALCULATION = 365 days divided by Accounts recievable turnover

Allowance for bad debts

A contra-asset account utilized to accumulate totals against accounts receivable


Determining the fundamental significance of business transactions so that financial information may be properly processed


Property of monetary value owned by a business

Bad Debt expense

Accounts receivable that are uncollectible

Balance sheet

a formal financial statement illustrating the assets, liabilities, Owners equity of a business as of a specific date

Balance sheet common size statements

express the major items in the balance sheet as a percent of the total assets and compare with previous fiscal periods

Bankers method / 360 day method

a method of computing interest based on the assumption that there are 360 days in a year

BAnk statement

an itemized listing prepared by the bank of additions to the subtractions from a depositors account


one who is involved in the process of recording financial information in a prescribed manner


The recording of financial information in a prescribed manner

Book value

The cost of a fixed asset less its accumulated depreciation

Business paper

The 1st record of a business transaction , such as check stubs, receipts, sales invoices, purchase invoices, cash register tapes ect,,

Calendar year

a twelve month period beginning January 1st and concluding on December 31st

Cancelled check

a heck which has been paid b the bank and returned to the drawer for recordkeeping


The amount by which the total assets exceed the total liabilities of a business an owners financial interest in a business


coins , currency ( paper money) checks , credit card receipts and money orders received from others, as well as money deposited in the bank

Cash basis accounting

an accounting partice in which revenue is not recognized in the accounting records until received and in which expenses are not recognized until paid

Cash discounts

discounts from quoted priced as an inducement for prompt payment of invoices

Cash disbursements

Money and money substitutes paid

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