Account: The representation of assets, expenses ...
Account: The representation of assets, expenses, liabilities, and revenues in the general ledger, to which debit and credit entries are posted to record changes in the value of the account.
Accountant: person responsible for ensuring accuracy of journal entries, prepares financial statements, prepares and reviews corporate and employment tax returns
Accounting Period: The period covered by an income statement (e.g., month, year); also known as the business cycle.
Accrual: The recognition of assets, expenses, liabilities, or revenues after the cash value has been determined but before it has been transferred.
Adjusting Entry: An entry made at the end of an accounting period to update or adjust an account before financial statements are prepared.
Audit: A review of a business’s records and procedures to determine their accuracy and completeness.
Balance: Net value of an account, as determined by calculating the difference between the debits and credits in the account.
Balance Sheet: A financial statement that presents a business’s financial position in terms of its assets, liabilities, and owner’s equity as of a certain date (generally the end of the company’s fiscal year, but may be issued quarterly as well).
Bookkeeper: person who gathers information needed by accountant, usually responsible for accounts payable, accounts receivable, payroll and credit
Budgeting: involves projecting the costs and revenues associated with various business activities and trying to keep the costs within target limits
Business Transactions: items that must be reflected in the organization’s financial statements
Cost Accounting: determine the cost of producing a product or providing a service and to show ways of controlling these costs
Cost of Goods Sold: new material, direct labor, and supplies used in production, generally does not include overhead expenses.
Credit: An accounting entry that increases liabilities and revenues and decreases assets and expenses.
Debit: An accounting entry that increases assets and expenses and decreases liabilities and revenues.
Double-Entry Accounting: The recording of equal debits and credits for every financial transaction.
External Audit: An audit of an organization’s financial statements by a disinterested third party (e.g., an outside accountant or accounting firm).
FASB: Financial Accounting Standards Board. Group that sets the standards for sound financial management.
Financial Statements: Reports that summarize a business’s financial position and operating results (comprised of a balance sheet, income statement, and statement of cash flow).
GAAP: Generally Accepted Accounting Principles. A set of rules and procedures set forth by the
Financial Accounting Standards Board that outline accepted accounting practices broadly and in detail.
GAO: General Accounting Office.
Gap Analysis: Comparison of the functionalities of old and new payroll systems to determine if there are any gaps in the functionality of the new system that need to be addressed before going live.
GASB: Governmental Accounting Standards Board. Group that sets the standards for sound governmental financial management.
General accounting: record transactions in the company’s books of account and to prepare financial statements both or internal and external purposes
General Ledger: A ledger containing all the transactions in the debit and credit accounts of a business.
Gross Profit: Net Sales lest Cost of Goods Sold
Income Statement: A financial statement showing a company’s results of operations for an accounting period or fiscal year.
Internal Audit: An audit of a business’s policies, procedures, operations, and records carried out by employees of the business as opposed to outside parties.
Journal: A record of financial transactions that debit or credit an account. Book of original entry.
Liabilities: Debts of a business that have yet to be paid.
Matching Principle: Matching revenue earned during an accounting period with the expenses incurred in generating the revenue.
Net Earnings: a/k/a Net Profits – profit or loss of business after taxes
Owner’s Equity: The assets of a company less its liabilities.
Paid in Capital: shareholders equity not generated from earnings of the business
Post: transfer of amount from journal entry to general ledger accounts
Reconciliation: The process of ensuring that amounts withheld, deposited, paid, and reported by employers agree with each other and that if they do not, determining the reasons and making the necessary corrections.
Retained Earnings: profit that remains in a business after dividends are paid to owners
Shareholders Equity: used by corporations to describe the residual claims that shareholders have in a business after all debts have been paid
Working Capital: current liabilities less current assets. Assets of a business that are available for its day to day operations.
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