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# Glossary - Accounting Terms ## 0 **Objectivity Principle:** See GAAP Appendix. **On account:** An item purchased or sold that is not paid for at the time, money received or paid to reduce an amount owed. **Opening an account:** The process of setting up a new account in the ledger. **Opening...

# Glossary - Accounting Terms ## 0 **Objectivity Principle:** See GAAP Appendix. **On account:** An item purchased or sold that is not paid for at the time, money received or paid to reduce an amount owed. **Opening an account:** The process of setting up a new account in the ledger. **Opening entry:** The first accounting entry in the general journal, the entry that records the beginning financial position of a business, thereby opening the books of account. **Out of balance:** A state in which the total value of all accounts (or columns in a journal) with debit balances does not equal the total value of all accounts (or columns in a journal) with credit balances. Contrast *In balance*. **Outsiders:** A company's bankers and other creditors, prospective investors, shareholders, government agencies such as Revenue Canada, and others who do not have access to company information as do insiders. Contrast *Insiders*. **Outstanding cheque:** A cheque that is issued and recorded, but not cashed, during the period covered by a bank statement, and therefore is not recorded on the bank statement. See *Discrepancy item*. **Owner's equity:** The difference between the total assets and total liabilities of a business. Same as Capital, Net worth. ## P **Partnership:** A form of business in which more than one person shares in the ownership and operation of a business. **Partnership agreement:** A legal contract that sets forth the terms and conditions of the partnership. **Payment system:** A method that people use to exchange one value for another. **Payment on account:** Money paid to a creditor to reduce the balance owed to that creditor. **Payroll:** The total process of calculating and preparing the employees' earnings. **Payroll journal:** A columnar page on which are recorded the details for calculating individual net pays of employees as well as the total payroll figures for the period. Same as Payroll register. **Payroll register:** A columnar page on which are recorded the details for calculating individual net pays of employees as well as the total payroll figures for the period. Same as Payroll journal. **Pencil footings:** Tiny pencil-figure totals used in accounts and journals. Same as Pin totals. **Percentage analysis:** Turning the figures on a financial statement into percentages of one base figure, usually the net income (income statement) or assets (balance sheet). The results are used in analyzing financial statements.