Accounts Payable
Unwritten promises of a business to pay creditors
Accounts Receivable
Unwritten promises by customers to the business pay at a later date
Accrual Accounting
Recording in each fiscal period applicable expense, whether paid or not, and income earned, whether collected or not
Accrued Income
Income earned during an accounting period but not yet received
Acid Test Ratio
Comparison of cash and all the other current assets that are readily recognizable in cash with the current liabilities
Allowance of Depreciation
An account used to accumulate decreases in value of fixed assets
Allowance of Doubtful Accounts
An account in which is recorded the decrease in value of accounts receivable due to possible uncollectible items
Assets
Properties of monetary value owned by a business. Things of value owned by a business.
Bad Debts
Accounts receivable that are uncollectible
Balance Sheet
A statement of assets, liabilities, and proprietorship at a specified date
Balance Sheet
A statement regarding the status of assets, liabilities, and owners equity as of a specified date; Statement of assets, liabilities, and owners equity at a specific date; Statement of financial condition; The financial statement reflects the status of ass
Bank Statement
An itemized listing of additions to and subtractions from a depositor's account
Blank Endorsement
Consists merely of the signature of the endorser on the back of the check
Book Value
Cost of a fixed asset less accumulated depreciation
Bookkeeping
The recording of business data in a prescribed manner
C.B.D.
Collect before Delivery
C.I.F.
Cost, Insurance, and Freight
C.O.D.
Collect on Delivery
C.P.A.
Certified Public Accountant
Canceled
Check returned to the depositor that has been paid by the bank
Capital
The net value of an owners financial interest in a business
Cash Asset
Money
Cash
Coins, currency, checks, and money orders received from others, as well as money deposited in the bank
Cash Payments Journal
Used to record paying cash for an item; used to record the paying of cash
Cash Receipts Journal
For receiving cash for merchandise; used to record the receipt of cash
Cash Receipts
Money and money substitutes received
Cashier's Check
A check drawn by a bank on its own funds and signed by the cashier. A check which carries the guarantee of the drawee that sufficient funds are available to pay the check when it is properly presented
Certified Public Accountant
An individual certified to practice public accounting in a state
Charter
A document issued by a state which permit's a corporation to operate
Check
A written order drawn by a depositor directing his bank to deduct money from his account and pay the person or company designated
Check Register
A special book in which payments made by check are recorded
Check Stub
A source of information for the journal
Chronological
In order of time
Closing Entries
The transferal of the balances of the temporary accounts to the capital account
Compound Entry
A journal entry that contains two or more debits or two or more credits
Consignor
The person or business concern by whom a shipment is made
Corporation
A business, owned by stockholders, which is chartered under state law to conduct a business or other activity
Corporation
Stockholders
Cost
Amount paid by a business for merchandise
Credit
The right side of a standard account
Creditor
A business or individual to whom a debt is owed. One to whom debts are owed
Current Asset
Accounts Receivable
Current Asset Ratio
The comparison of current assets with current liabilities
Current Asset
To be used relatively soon
Current Assets
Cash or other assets that will be converted into cash or consumed within one year
Current Liabilities
Debts that must be paid within a year
Current Liability
Accounts Payable
Current Liability
Accounts Payable
Current Ratio
Current assets divided by current liabilities
Debit
The left side of a standard account
Debtor
One who owes debts
Deferred
To delay until a later date
Disbursement
A payment
Drawer
A person who signs a check or draft ordering payment to be made; The one who orders the bank to pay money from his account.
Drawing Account
A separate owners equity account in which withdrawals of assets against profits by the owner are recorded
Endorsement in Full
Endorsement which uses the phrase, "pay to the order of
Expense
The decrease in owners equity due to consumption of goods and services used in the operation of a business
F.O.B.
Free on Board
Fiscal Period
The period for which an analysis of the operations of a business is made
Fiscal Year
An accounting year ending some other date than December 31st
Fixed Asset
Asset which will not be sold during the fiscal period
Fixed Asset
Funeral Coach
Fixed Asset
Land, Buildings, Equipment
Fixed Asset
To be used over a long period of time
Fixed Liability
Mortgage payable within 15 years
General Journal
Used for all types of business transactions; used for miscellaneous entries
Income
Increase in the owners equity resulting from business operations
Income Statement
A formal statement which presents the revenue and expenses of a specified period of time. Statement of income, expenses, and net income or net loss for a period of time
Income Tax
Levied on the earnings of individuals and businesses by federal, state, and local government
Insurance Policy
A contract between an insurance company and the party insured
Insurance Premium
The amount paid for insurance protection
Intangible Asset
Not physical or material
Interest
Money paid for the use of money
Inventory Turnover
Determined by dividing the cost of goods by the average inventory
Investment
The money or other assets supplied by the owner for the operation of a business
Invoice
A paper showing quantity, description, prices of items, total amount of purchase and the terms of payment
Journal
A book of original entry in which business transactions are recorded in chronological order
Journal
Book in which the first formal double entry record of transactions is made; the Book of original entry
Ledger
A book of accounts
Liabilities
Any debt that a business owes
Long-Lived Asset Ratio
The comparison of the fixed assets with the fixed liabilities
Maker
The individual who makes a promise to pay on a promissory note
Markup
Amount added to cost of merchandise to determine the selling price
Merchandising Business
A business firm that obtains income through the buying and selling of goods
Mortgage payable
A written promise that pledges real property as security for the payment of a debt
Negotiable instrument
A business paper that is a claim on cash and which may be transferred legally by endorsement
Net working capital
Excess of current assets over current liabilities
Notes Payable
A written promise of a business to pay a creditor a certain amount in the future
Notes Receivable
A written promise of a customer to pay the business a sum of money at a future date
Outstanding
A check that has been issued but not yet presented for payment
Owners Equity
An owners financial interest in a business or the Difference between assets and liabilities
Partnership
A business owned by two or more individuals with profits or losses jointly shared
Payee
The one to whom the bank is order to pay the cash
Posting
Recording information in a ledger
Posting reference
Journal page numbers and ledger account numbers which, when present, confirms that an entry has been posted
Principal
The face value of a note on which interest is computed
Profit and Loss Statement
A summary of the results of operations for a specified period of time
Promissory Note
A written promise to pay money to another person or business at a specified or determinable time
Proprietorship
Capital or Net Worth
Proprietorship
Owners equity
Proprietorship
The owners equity or the owners financial interest in a business
Purchase Returns and Allowances
Credit received for shortages or for damaged goods received
Purchases Journal
For recording the buying of an article on credit; used to record the buying of merchandise on credit
Purchases
The buying of merchandise
Restrictive Endorsement
Endorsement which uses the phrase, "for deposit only
Retail Sales Tax
Imposed upon the purchaser of goods and collected by the seller, who remits such to the state or city government
Sales Discount
A deduction from the sales invoice as a n incentive for customers to pay their invoices early
Sales Journal
Used for recording sale of merchandise on credit
Sales
Ordinarily refers to only merchandise sold
Sales Returns and Allowances
Credit given to a customer for shortages or damaged goods delivered
Source Document
The first record of a business transaction
Statement of Account
A report sent to each customer which indicates the status of his account
Stock Certificate
Evidence of the ownership of corporation stock
Supplies
A type of asset that will be consumes as it is used
Tangible Asset
Capable of being touched
Terms
The time allowed for the payment of a sale
Total Asset Ratio
Comparison of total assets with total
Transaction
Financial events that affect assets, liabilities, or owners equity
Trial Balance
A check of equality of debits and credits
Trial Balance
An informal statement proving that total debit balances are equal to the total credit balances in the ledger
Valuation Account
An account used to record or determine the estimated value of an asset
Withdrawals
Assets taken out of the business by the owner for his personal use