Various Terms of Accounting

4. Balance: A summary of all the ledger account balances, used to check the accuracy of the books.
8. Money owed to a business by customers or other debtors for goods or services provided on credit.
13. Obligations or debts owed by a business to external parties, such as creditors.
15. The process of recording, summarizing, and analyzing financial transactions of a business.
16. Costs incurred by a business in the process of earning revenue, like rent, salaries, and utilities.
17. The entry on the right side of an account in double-entry bookkeeping, representing a liability or equity.

1. A book of original entry where all financial transactions are first recorded.
2. Sheet: A financial statement showing the business’s financial position, listing assets, liabilities, and equity at a specific point in time.
3. The amount invested by the owner(s) in the business, either in cash or in kind.
5. The systematic allocation of the cost of a fixed asset over its useful life.
6. The recording of revenues and expenses when they are incurred, regardless of when cash is exchanged.
7. Balance: A statement that ensures the equality of debits and credits in the ledger accounts.
9. A book or electronic record where individual accounts are maintained for each item in the journal.
10. The entry on the left side of an account in double-entry bookkeeping, representing an asset or expense.
11. Income earned by a business from its normal business activities, like sales of goods or services.
12. and Loss Account: A financial statement that shows the business’s profitability over a period by summarizing revenues and expenses.
14. Reconciliation: The process of comparing a company’s cash records with the bank’s records to ensure consistency.
15. Resources owned by a business that are expected to provide future economic benefits.
16. The owner's residual interest in the assets of the business after deducting liabilities.
17. Flow: The movement of cash into and out of a business over a period of time.