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36 terms

Accounting gloss

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Account
A device for recording the changes ( increases or Decreases) in the fundamental accounting elements
Accountant
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
Accounting
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
ACID TEST RATIO ( QUICK RATIO)
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
Analyzing
Determining the fundamental significance of business transactions so that financial information may be properly processed
Assets
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
Bookkeeper
one who is involved in the process of recording financial information in a prescribed manner
Bookkeeping
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
CAPITOL
The amount by which the total assets exceed the total liabilities of a business an owners financial interest in a business
Cash
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