Accounting is the process of identifying, measuring, recording, and communicating economic transactions. Typically, this is done using monetary terms and involves the preparation of financial statements such as profit and loss accounts and balance sheets.
The Accounting Equation forms the foundation of the balance sheet and illustrates how assets, liabilities, and equity are interrelated, ensuring that the balance sheet remains balanced.
Accounting records are essential documentation that provides a detailed account of financial transactions pertaining to a particular organization, allowing for accurate tracking and analysis of financial performance over time.
Programs used to maintain books of account on computers. The software can be used to record transactions, maintain account balances, and prepare financial statements and reports. Many different accounting software packages exist.
AIAB stands for Associate of the International Association of Book-keepers, a professional designation representing advanced knowledge and expertise in bookkeeping and accounting practices.
A balancing figure is inserted in accounting to ensure that the totals of both sides of the ledger are equal, typically when preparing a trial balance.
A Book of Account refers to the formal record maintained by a business entity to document its financial transactions. These records are essential for bookkeeping and accounting, ensuring that all financial activities are accurately tracked and reported. Books of account typically include journals, ledgers, and other financial documents that reflect the business's financial performance and position.
A Book-Keeper is a person responsible for recording the financial transactions and maintaining the books of account for a business. This role is vital for the accurate and efficient tracking of all financial events in an organization.
A bookkeeper is a professional responsible for recording financial transactions and maintaining accurate financial records for an organization. Bookkeepers use accounting systems to track expenses, income, and other monetary movements, aiding in the financial management of a business.
In bookkeeping, the term 'brought forward' (b/f) describes an amount that is the total of the corresponding column on the previous page, helping ensure continuity and accuracy in financial records.
A Business College is an educational institution that primarily focuses on teaching the clerical and administrative aspects of business, such as typing, word processing, filing, and bookkeeping. It is different from a business school or a college of business found in accredited colleges or universities.
Carried Down (C/D) is an accounting term used to indicate that the total balance from the previous page of a ledger is carried down to the top of the new page.
Carried forward (c/f) is an accounting practice of bringing the balance of an account from one accounting period over to the next.
An accounting term used to describe the total of a column of figures that is to be the first item in the corresponding column on the next page.
A Cash Payments Journal is a specialized accounting book or log used to record all cash disbursements made by a business in a sequential manner.
The Cash Receipts Journal is a specialized accounting ledger used to record all cash inflows received by an organization. This ledger often records cash deposits into the organization's bank account and may be combined with other journals for comprehensive cash flow tracking.
A day book utilized for recording payments of cash from an organization's bank account, often integrated with a cash-receipts journal to form a complete cash book.
In accounting, a closing entry is one of the final entries made at year-end to close accounts and transfer the amounts to financial statements, ensuring all temporary accounts are reset for the next accounting period.
Columnar accounts refer to accounts that are organized in multiple columns to present financial information more clearly and systematically. This structure is often used to present a trial balance, facilitating automatic adjustments into financial statements.
A columnar journal is a specialized accounting book or ledger with pre-printed columns designed to systematically facilitate the recording and categorization of numerical data. Often used in bookkeeping, these journals streamline the process of capturing financial transactions for further processing.
A contra account is an account used in a general ledger to reduce the value of a related account. These entries are used to adhere to accounting principles such as matching and conservatism.
Data processing is a class of computing operations that manipulate large quantities of information. It forms a major use of computers in business operations such as bookkeeping, printing invoices, payroll calculations, and general record keeping.
A debit is an entry on the left-hand side of an account in double-entry bookkeeping that increases assets or recorded expenditures of an organization. In the context of a bank account, a debit indicates an outflow of funds.
In accounting, a debit (DR) refers to any entry recording an addition to an asset or expense account, or a reduction from a liability or equity account.
Double-entry accounting, also known as double-entry bookkeeping, is a system of financial records used in business whereby equal debits and credits are recorded for each transaction, ensuring the accounting equation (Assets = Liabilities + Owner's Equity) remains balanced.
An entry is a record made in a book of account, register, or computer file of a financial transaction, event, proceeding, etc. Entries are fundamental in the accounting process, ensuring that all financial activities are accurately recorded and tracked.
An abbreviation for 'Fellow of the International Association of Book-keepers (IAB)', a professional designation awarded by the IAB to recognize the highest level of membership and excellence in the field of bookkeeping and accountancy.
In accounting, 'footing' refers to the process of totaling a column of numbers to ensure accuracy in financial statements. This fundamental task is essential in maintaining the integrity of financial data.
The General Journal, often regarded as the book of original entry, is a pivotal element in the accounting process. It is where all financial transactions are initially recorded before they are posted to the ledger accounts. The General Journal includes straightforward and complex entries and serves numerous accounting purposes.
The General Ledger (GL) is a key component of an organization's accounting system, serving as a comprehensive record of all financial transactions made over the life of an organization.
An impersonal account is a type of ledger account that does not bear the name of an individual and includes nominal accounts and real accounts.
The imprest system is a bookkeeping system where a fixed amount of money is reserved for minor expenses and is periodically replenished.
The International Association of Book-keepers (IAB) is a globally recognized institute offering bookkeeping and financial management qualifications.
A journal entry is a detailed record of a business transaction in accounting, consisting of debits and credits and supporting a specific accounting period.
In accounting, to journalize means to record financial transactions in a journal, such as the general journal, as a part of the accounting process.
The term 'over-and-short' is frequently used in accounting to indicate discrepancies between recorded amounts and actual amounts, usually involving cash or inventory.
Paper profit refers to an increase in the value of an asset that is recorded in the books but has not been realized through a sale. It's a theoretical gain that can fluctuate greatly before any actual profit is recognized.
Personal accounts are used to record transactions with individuals or entities, such as debtors and creditors. These accounts are essential for managing relations and obligations with people and organizations.
A personal ledger is an accounting record containing a summary of all transactions related to individuals or specific entities such as debtors and creditors.
A multi-faceted term used across various fields such as physical display, bookkeeping, civil procedure, commercial law, and property management.
The Purchase Day Book, also known as Bought Day Book in the US, is a financial ledger in accounting where all purchase and expense transactions made on credit are recorded before being posted to the individual supplier accounts in the General Ledger.
A Purchase Journal is a specialized accounting book where all purchases made on account are initially recorded. It typically includes details about the date of purchase, supplier name, purchase amount, and other relevant information to maintain accurate financial records.
Real accounts refer to ledger accounts used to record property, plant, equipment, and other assets, distinguishing them from nominal accounts which track revenues and expenses.
Reckoning involves settling accounts through detailed counting and computations to achieve a final total or conclusion.
A Registered Book-keeper is a professional certified by the International Association of Book-keepers (IAB), ensuring competency in managing financial records accurately and ethically.
A Sales Day Book, also known as a Sales Journal or Sold Day Book, is an essential accounting record used to document invoices issued to customers for goods or services provided by an organization.
The first document to record a transaction, serving as proof of an event recorded by the company’s accounting system.
A preliminary sum that represents the total of a set of numbers before any additional amounts, such as taxes or discounts, are included.
A suspense account is a temporary account in the books of an organization used to record balances to correct mistakes or balances that have not yet been finalized.
A visual representation used in accounting to depict individual ledger accounts, reflecting debits and credits in a format resembling the letter 'T'.
A visual representation used in accounting to represent individual accounts where debits and credits are recorded. Resembling the capital letter 'T', it simplifies the tracing of transactions and helps ensure accurate bookkeeping.
A three-column cash book is an extended form of the cashbook which includes columns for discounts allowed and received in addition to cash and bank transactions.
The balance of an item of expenditure that has not yet been written off to the profit and loss account, representing the value of goods or services that will provide future economic benefits.
A voucher serves as a receipt for money or any document that supports an entry in a book of account, acting as evidence for financial transactions.
A voucher register is a book or electronic record used to list vouchers, generally in chronological and numerical order. Vouchers are original documents serving as evidence for a business transaction.
