Account
A specifically ruled page to record financial changes.
Account Balance
The value of an account showing its dollar amount and whether it is a debit or a credit account.
Accounting Period
The period of time over which the earnings of a business are measured. Also called a fiscal period.
Accounts Payable
The money a business owes to its creditors.
Accounts Receivable
The money that is owed to a business by its customers.
Asset
Anything owned that has a dollar value.
Audit
The examination of accounting records and internal controls of a business in order to express an opinion about the business's financial position and results of the operation.
Balance Sheet
A statement showing the financial position of an entity on a certain date. Includes assets, liabilities and capital.
Bank Credit Advice
A business form in which a bank informs a depositor of an increase in the bank account and the reason for an increase.
Bank Debit Device
A business form in which a bank informs a depositor of a decrease in the bank account and the reason for a decrease.
Book of Original Entry
Any journal that contains the first or original record of the first transaction. Also called a journal.
Transaction
A financial event that changes the values in certain accounts and therefore affects the financial position of a business.
Capital
Difference between the total assets and liabilities of a business. Also known as net worth or owner's equity.
Cash Discount
A reduction that may be taken in the amount of a bill provided that the full amount is paid within the discount period shown on the bill.
Cash Receipt
Funds taken in from business operations and include all items that are considered to be money.
Cash Receipts Daily Summary
A business paper that is prepared daily. It lists the cash received from customers on account.
Cash Sales Slip
A business form showing the details of a transactions in which goods or services are sold to a customer for cash.
Cash Short or Over
The amount of money that the business's cash receipts are more or less than what they should be.
Certified Cheque
A cheque for which the bank takes the funds out of the payer's account in advance, and puts them aside to honour the cheque when it is presented.
Cheque Copy
A source document for a copy of a cheque.
Classified Balance Sheet
A balance sheet that lists items in their major categories.
Cash Proof
An accounting procedure that compares cash receipts, according to the source documents, against cash receipts according to a physical count.
Chart of Accounts
A list of accounts of a business and their numbers according to their position in the ledger.
Cash on Delivery
A term of sale whereby goods must be paid for at the time they are delivered. (C.O.D.)
Control Account
A general ledger account that must be considered along with a given asset account to show the true book value of the asset account.
Cost of Goods Sold
The total cost of goods sold during an accounting period.
Credit
The value on the right side of an account.
Creditor
Anyone who is owed money by the business.
Debit
The value on the left side of an account.
Debtor
Anyone who owes money to the business.
Depreciation
The decrease in value of a fixed asset over time.
Drawings
A decrease in owner's equity from a personal withdrawal of funds by the owner.
Expense
A decrease in equity from the costs of the materials and services used to produce the revenue.
Fiscal Period
The period of time which earnings are measured. Also called an accounting period.
Fixed Asset
A long term asset held for its usefulness in producing goods or services. Also called plant and equipment.
Current Asset
An asset that can be quickly turned into cash within a short period of time.
Freight-in
Transportation charges on incoming merchandise.
Generally Accepted Accounting Principals
Guidelines established by professional accountants to be followed in the preparation of accounting records and financial statements. (GAAP)
GST
Goods and Services Tax.
Income
An increase in equity by the sale of goods or services.
Income Statement
A financial statement that summarizes the items of revenue and expenses. At the end, it shows the net income or net loss of a business in a given fiscal period.
Income Summary Account
The temporary account to which the total revenues and the total expenses are transferred during the closing process.
Journal
A specially ruled book in which accounting entries are recorded in the order in which they occur.
Journalizing
The process of recording entries in the journal.
Late Deposit
A deposit that is made on the last day (usually) of the period covered by the bank statement but does not appear on the bank statement until the following period.
Ledger
A group of accounts that can be stored as pages in the books, cards on a tray, tapes on a reel or on a disk.
Liability
A debt of an individual, business or other organization.
Long-term Liability
A liability which, in the ordinary course of business will not be paid within one year.
Manufacturing Business
A business that buys raw materials and converts them into new products to sell for a profit.
Manufacturing Statement
Accounting form that shows the cost of manufacturing goods in a fiscal period.
Net Income
When revenues are greater than expenses.
Net Loss
When expenses are greater than revenues.
Non-profit Organization
An organization that carries activities to meets the needs of society and not for profit.
NSF
A cheque that was not cashed when presented to the issuer's bank because they were not sufficient funds
Opening Entry
The first accounting entry in the general journal.
Owner's Equity
Same as Capital and Net Worth.
Pencil Footings
Tiny pencil figure totals used in accounts and journals.
Periodic Inventory Method
The method of accounting for merchandise inventory in which the cost of the inventory sold is determined only at the end of an accounting period.
Perpetual Inventory Method
A meth of accounting for merchandise Inventory in which the record of items in stock is kept up to date on a daily basis.
Pin Totals
Tiny pencil-figure totals used in accounts and journals.
Plant and Equipment
Long terms assets held for their usefulness in producing goods and services. Also called a long term asset.
Posting
The process of transferring the accounting entries from the journal to the ledger.
Prepaid Expense
An expense that is paid for in advance.
PST
Provincial Sales Tax.
Public Accounting
Professional done by public accountants who offers their services to the public for a fee.
Purchase Invoice
An invoice used as a source document for recording a purchase on account transaction.
Purchase on Account
A purchase that isn't paid for at the time the transaction was made.
Revenue
An increase of equity from the sale of goods or services.
Sale on Account
A sale in which no money is received at the time the transaction is made.
Sales Invoice
A business form showing the goods or services sold on account to the purchaser, given by the seller.
Service Business
A business that sells a service.
Source Document
A business paper that is the original record of the transaction and provides information needed when accounting for the transaction.
Synoptic Journal
Journal in which transactions are recorded in a spreadsheet format. Each account is assigned its own column, and amounts are added or subtracted inside the columns.
Taking Off a Trial Balance
The process of comparing the total value of the debit accounts in a ledget with the total value of the credit the credit accounts in a ledger.
Trial Balance
A special listing of all the account balances in the ledger to make sure that the a debit account values and credit accounts values match.
Work Sheet
An informal business form prepared in pencil on column paper. It is used to organize and plan the information for the financial statements.
Accounting Cycle
The total set of accounting procedures that are done during each fiscal period.
Closing an Account
To cause an account to have a nil balance by means of a journal entry.
Forwarding
The process of continuing an account or journal on a new page by carrying the relevant information on the next page.