Accounting Terminology meaning.
Non-accounting people can be misled by the accounting terms used. Every business has its own jargon and accounting is no exception. Accountants need these terms to do their job properly. For the layman that however can be very daunting. Common basic accounting terms are listed below, along with the Full User Cash Book .
Accounts Payable Also called A/P or Creditors. Accounts payable are the invoices your company owes to vendors. View bills to pay in full screen Cash Book.
Accounts Receivable Also called A/R or debtors, accounts receivable are amounts owed to you by your customers. See the full cashbook billing section.
Accrual accounting uses the accrual method, which records income when the sale occurs, not necessarily when you receive payment. You record an expense when you receive the goods or services, even though you can't pay for them until later. Full Cash Book uses Cash Based Accounting as it is easier to learn and understand.
Assets Things of value held by the company. Assets are balance sheet accounts. Examples of assets are accounts receivable, furniture, fixtures, and bank accounts. View Balance Sheet The categories in the category settings.
Balance Sheet Also called a statement of financial position, it is a financial "snapshot" of your business at a given point in time. it shows the asset and the liability and the diffrence in between which is equity and a net worth.. Found in the Full Cashbook Cashbook menu.
Capital of money invested in the business by the owners. Also called fairness.
Cash Accounting is the method where we record the income when we recieve cash from customers. You record an expense only when the check is written to the vendor. Complete Cash Book uses this method of accounting.
General Chart of Accounts The list of account titles you use to keep your accounting records.
Full Cash Book uses a simplified version of a chart of accounts and is called Cash Book Categories (in the Setup Wizard).
Cost of Goods Sold ( CPV ) The cost of the items or services that are sold to your customers.
Creditor A company or person to whom you owe money. View bills to pay in full screen Cash Book.
Credits At least one component of each accounting transaction (journal entry) is a credit. Loans increase liabilities and equity and decrease assets.
Assets Current assets that are in the form of cash or are generally converted to cash or used within one year. Examples of this are accounts receivable and inventory.
Current liabilities Liabilities payable in one year. Examples of this are accounts payable and payroll taxes payable.
Debits At least one component of every accounting transaction (journal entry) is a debit card. Debits increase and assets, liabilities and equity decrease.
Debtor A company or person that owes you money. View outstanding invoices in full cash book.
Depreciation An annual amortization of a portion of the cost of fixed assets, such as vehicles and equipment. Depreciation is listed under expenses on the income statement. With a full cash book, this is normally done by your accountant at the end of the year.
Double Entry Bookkeeping In double entry bookkeeping, each transaction has two entries: one debit and one credit (called a journal entry). Debits must always equal credits.
General ledger based accounting programs use double entry accounting.
Equity The net worth of the company. Also called owner's equity or equity. Equity comes from the owners' investment in the business, plus the accumulated net profits of the business that have not been paid to the owners.
Fixed Assets Assets that are not generally converted to cash within a year. Examples of this are equipment and vehicles.
General Ledger A general ledger is the collection of all balance, income, and expense accounts used to maintain a company's accounting records. A general ledger works with accounting journal entry and double entries for each transaction. Complete Cash Book uses cash based accounting.
Income Accounts are which accounts used to keep track of your sources of income. Examples of this are merchandise sales, consulting income, and interest income.
Income Statement also called a profit and loss statement or a "P&L." It lists your income, expenses, and net profit (or loss). Net profit (or loss) is equal to your income minus your expenses. This is found under the Full Cashbook Cashbook menu.
Inventory ( inventory ) The goods that they have for sale to customers. Inventory can be merchandise that you buy for resale, or it can be merchandise that you manufacture.
Journal The chronologies, the day-to-day transactions of a business, are recorded in the sales, cash receipts, and cash payment journals. A general journal is used to enter the period-end closing adjustment and closing entries and other special operations that are not entered in the other journal.
Liabilities What your business owes to your creditors. Examples are accounts payable payable and loans payable.
Long-term liabilities is a Liabilities which are not due within one year.- example mortgage payable.
Net Income Also called profit or net profit, which is equal to income minus expenses. Net income is also called the profit and loss statement.
Profit and Loss is also called an "Income Statement" or "P&L." It lists your income, expenses, and net profit (or loss). Net profit or net loss is equal to your income but minus your expenses. This is found under the Full Cashbook Cashbook menu.
Retained earnings benefits of the company that have not been paid to the owners; earnings that have been "retained" in the business.
Balance a list of categories (or general ledger accounts) and their totals. View the Cash Balance Report in the full Cash Book.
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