Accounting

- process of tracking and reporting financial information in order to make informed decisions

Accounting Equation

- assets = liabilities + equity

Accounts Payable

- record of money owed to creditors, vendors, etc

Accounts Receivable

- record of money owed to a business, i.e.: sales

Accrual Accounting

- a method in which income is recording when it is earned and expenses are recorded when they are incurred

Asset

- property owned by a business or individual that has a cash value

Balance Sheet

- summary of assets, liabilities, and equity

Bookkeeping

- process of recording financial information

Chart of Accounts

- a numbered listing of accounts within a business

Credit

- an entry with a negative value for assets, and positive value for liabilities and equity.

Debit

- an entry with a positive value for assets, and negative value for liabilities and equity.

Depreciation

- decrease in the value of an asset due to age and use

Double-Entry Bookkeeping

- system of accounting in which every transaction has a positive and negative entry (debits and credits)

Equity

- the money owed to the owners of a company

Financial Statement

- a record containing the balance sheet and the profit/loss statement

Fixed Asset

- long-term tangible property; building, land, computers, etc.

General Ledger

- a summary of all accounts within a business

Job Costing

- system of tracking costs associated with a job or project (labor, equipment, etc) and comparing with forecasted costs

Journal

- a record where transactions are recorded, also known as a « ledger »

Ledger

- see « journal »

Liability

- money owed to creditors, vendors, etc

Liquid Asset

- cash or other property that can be easily converted to cash

Loan

- money borrowed from a lender and usually repaid with interest

Note

- a written agreement to repay borrowed money; also used synonymously with « loan »

Payroll

- list of employees and their wages

Profit

- money left over after all expenses have been paid

Profit/Loss Statement

- a record that summarizes the income and expenses of a business

Revenue

- total income before expenses

Single-Entry Bookkeeping

- system of accounting in which transactions are entered into one account