Questions and Answers
What are the two types of accounts?
What is the abbreviation for Accounts Payable?
A / P
What is Accounts Receivable abbreviated to?
A / R
What does Aging track?
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What defines an Asset?
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What is a Chart of Accounts?
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What is the purpose of Company Snapshot?
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Who is considered a Customer?
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What is a Balance Sheet?
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What is the process of Budgeting?
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Equity = Assets - ______
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What does Depreciation mean?
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What is a Finance Charge?
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What is an Item in accounting terms?
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What is Inventory?
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What is an Invoice?
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What is Progress Invoicing?
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What is a Journal?
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What is Liability?
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What is a Liquid Asset?
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What is Net Income?
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What does Net30 mean?
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What does 1% 10 Net30 refer to?
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What is Posting in accounting?
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What is a Purchase Order?
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What is Reconciliation?
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Study Notes
QuickBooks Accounting Terminology
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Account
- Two types: real-world accounts (e.g., checking accounts) and income/expense accounts for transaction grouping.
- Helps in reporting by categorizing transactions.
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Accounts Payable (A/P)
- Records outstanding bills of a business.
- Essential for managing what the business owes.
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Accounts Receivable (A/R)
- Records money owed to the business for goods/services.
- Involves unpaid invoices pending payment.
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Aging
- Tracks outstanding invoices and unpaid bills for both A/R and A/P.
- QuickBooks offers preset aging reports showing current dues and overdue statuses.
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Asset
- Property with cash value owned by a business or individual.
- Represents resources that can generate future economic benefits.
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Chart of Accounts
- Complete list of company’s accounts and balances.
- Monitors company’s financial health by tracking assets, liabilities, and income.
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Company Snapshot
- Provides real-time information about the company.
- Allows for performing tasks from a centralized location.
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Customer
- Any individual or entity that pays the business for goods or services.
- Can include patients, clients, or retail customers.
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Balance Sheet
- Overview of a company's financial standing including assets, liabilities, and equity.
- Key for assessing financial health at a specific point in time.
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Budgeting
- Involves forecasting income/expenses and comparing actual figures for variance analysis.
- Essential for effective financial planning and control.
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Equity
- Represents money owed to the owners, also known as Owner's Equity.
- Calculated as Assets minus Liabilities.
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Depreciation
- Accounting method for allocating the cost of an asset over its useful life.
- Reflects the decrease in asset value due to use and aging.
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Finance Charge
- Interest or fees incurred when borrowing money on credit.
- Affects overall financial costs of running a business.
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Item
- Refers to anything billed on an invoice including parts, services, labor, discounts, and taxes.
- Critical for accurate billing and inventory tracking.
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Inventory
- Goods purchased for resale at a profit.
- Represents a significant asset for retail businesses.
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Invoice
- An itemized bill detailing goods sold/services provided, including individual prices and total charges.
- Crucial for tracking sales and ensuring payment.
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Progress Invoicing
- Invoicing based on stages of completion from an estimate rather than a single total.
- Useful for long-term projects with multiple payment phases.
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Journal
- A formal record of all transactions.
- Alternately known as an "Account."
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Liability
- Represents money the business owes to creditors, vendors, etc.
- Critical for understanding the company’s obligations.
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Liquid Asset
- Cash or property that can be quickly converted to cash.
- Important for ensuring liquidity in financial management.
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Net Income
- Remaining profit after all business expenses and taxes are deducted.
- A key measure of financial performance.
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Net30
- Payment term requiring payment within 30 days from the invoice date.
- Useful for cash flow management.
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1% 10 Net30
- Cash discount offering a 1% discount if paid within 10 days; otherwise, full payment is due in 30 days.
- Encourages prompt payment to improve cash flow.
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Posting
- Process of entering and permanently saving accounting records.
- Essential for maintaining accurate financial records.
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Purchase Order (PO)
- Document used for ordering inventory or supplies.
- Streamlines purchasing processes by specifying order details.
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Reconciliation
- Matching financial datasets, such as bank statements with accounting records.
- Crucial for ensuring accuracy in financial reporting.
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Sales Receipt
- Document issued when customers pay in full at the time of service/product delivery.
- Facilitates instant acknowledgment of sale transactions.
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Test your knowledge on essential QuickBooks accounting terms with these flashcards. Each term comes with a concise definition to help reinforce your understanding. Perfect for students and professionals looking to enhance their accounting vocabulary.
