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# Glossary - Accounting Terms This document is a glossary of accounting terms. It defines various accounting concepts, procedures, and financial statements. **Accounting Entry:** All the changes in the accounts caused by a business transaction, expressed in terms of debits and credits. The total...

# Glossary - Accounting Terms This document is a glossary of accounting terms. It defines various accounting concepts, procedures, and financial statements. **Accounting Entry:** All the changes in the accounts caused by a business transaction, expressed in terms of debits and credits. The total of debit amounts equals the total of credit amounts. **Accounting Period:** The period of time over which a business's earnings are measured. Same as Fiscal period. **Accounts Payable:** Money a business owes to its creditors, a liability. * **Accounts Payable Ledger:** A book or file containing all ordinary creditor accounts. **Accounts Receivable:** Money owed to a business by customers, considered an asset. * **Accounts Receivable Aging Schedule:** A detailed breakdown of how long customer accounts have been unpaid. * **Accounts Receivable Ledger:** A book or file containing all debtors (customer) accounts. * **Accounts Receivable Turnover:** The number of days it takes a business to collect accounts receivable. Same as Collection period. **Account Title:** The name of the account. **Accrued Expense:** An expense incurred during an accounting period, but payment is not due until a later period. This usually occurs with services which have been partially performed but not yet billed or paid for. **Acid-Test Ratio:** Ratio of current assets excluding inventory, to current liabilities. Same as Quick ratio. **Adjusting Entry:** An entry made before finalizing the books to apportion revenue or expenses to the correct accounting periods or operating divisions. For example, apportioning wages when the current period ends between pay periods. **Asset:** Anything owned that has a dollar value. Contrast with Liability. **Audit:** An examination of a business's accounting records and internal controls to form an opinion about the business' financial position and results of operations. **Auditing:** The process of conducting an audit. **Balance Column Account:** A common type of account with three money columns: debits, credits, and balance. Same as a Three-Column Account. **Balance Sheet:** A statement showing a business' financial position (assets, liabilities, and capital) on a specific date. * **Balance Sheet - Account Form:** Information presented side-by-side (horizontal). * **Balance Sheet - Report Form:** Information presented one above the other (vertical). **Bank Credit Advice:** A business form that a bank sends to a depositor to inform them of an increase in the deposit account and the reason. **Bank Debit Advice:** A business form that a bank sends to a depositor to inform them of a decrease in their deposit account and cause. **Bank Deposit:** An amount of money placed in a bank account. **Bank Reconciliation:** A procedure to find discrepancies between a bank's version of an account and a depositor's version. * **Bank Reconciliation Statement:** A statement showing differences between a bank account as viewed by the bank and by the depositor. **Board of Directors:** People elected by shareholders to make decisions for a corporation. **Book of Original Entry:** A journal, the first place where a transaction is recorded. **Bookkeeper:** An employee who ensures accurate recording of transactions and supporting documents. **Book Value:** The amount of equity that common shareholders have on a per-share basis. **Budget:** A plan that forecasts financial figures for a company or department. * **Budgeted Balance Sheet:** A plan that provides financial position forecasts. * **Budgeted Income Statement:** A financial plan that forecasts revenues and expenses for a set period. **Business Entity Concept:** (Further detail not provided) **Business Transaction:** A financial event that affects the values in certain accounts and thereby impacts a company's financial position.