SOME ACCOUNTING TERMS:

• ·         Accountancy- is the process of communicating financial information about a business entity to users such as shareholders and managers.[1]  The communication is generally in the form of financial statements  that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable.
• ·         Accounting – process of identifying, measuring, and reporting financial information of an entity
• ·         Accounting Equation – assets = liabilities + equity
• ·         Accounts Payable – money owed to creditors, vendors, etc.
• ·         Accounts Receivable – money owed to a business, i.e.: credit sales
• ·         Accrual Accounting – a method in which income is recorded when it is earned and expenses are recorded when they are incurred
• ·         Asset – property with a cash value that is owned by a business or individual
• ·         Balance Sheet – summary of a company’s financial status, including assets, liabilities, and equity
• ·         Bookkeeping – recording financial information
• ·         Cash-Basis Accounting – a method in which income and expenses are recorded when they are paid.
• ·         Chart of Accounts – a listing of a company’s accounts and their corresponding numbers
• ·         Cost Accounting – a type of accounting that focuses on recording, defining, and reporting costs associated with specific operating functions
• ·         Credit – an account entry with a negative value for assets, and positive value for liabilities and equity.
• ·         Debit - an account entry with a positive value for assets, and negative value for liabilities and equity.
• ·         Depreciation – recognizing the decrease in the value of an asset due to age and use
•       Double-Entry Bookkeeping - system of accounting in which every transaction has a corresponding positive and negative entry (debits and credits)
• ·         Equity – money owed to the owner or owners of a company, also known as “owner’s equity”
• ·         Financial Accounting – accounting focused on reporting an entity’s activities to an external party; ie: shareholders
• ·         Financial Statement - a record containing the balance sheet and the income statement
• ·         Fixed Asset - long-term tangible property; building, land, computers, etc.
• ·         General Ledger - a record of all financial transactions within an entity
• ·         Income Statement - a summary of income and expenses
• ·         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 an “account”
• ·         Liability - money owed to creditors, vendors, etc
•            Loan – money borrowed from a lender and usually repaid with interest
• ·         Net Income - cash or other property that can be easily converted to cash
• ·         Net Income - money remaining after all expenses and taxes have been paid
•  ·       Non-operating Income – income generated from non-recurring transactions; ie: sale of an old building
• ·         Note - a written agreement to repay borrowed money; sometimes used in place of “loan”
•      Operating Income – income generated from regular business operations
• ·         Payroll - a list of employees and their wages
• ·         Revenue - total income before expenses.
• ·         Single-Entry Bookkeeping - system of accounting in which transactions are entered into one account