An accounting event is a transaction or change, either internal or external, that is recognized by the accounting recording system. It involves recording entries as debits and credits.
Accounting records are the documentation used to prepare, verify, and audit the financial statements of a company. They provide a detailed account of all financial transactions, assets, liabilities, equity, revenues, and expenses.
Adjusting entries are critical for ensuring that financial statements reflect accurate and relevant financial information. They are posted to the accounting records at the end of an accounting period to correct any transactions or events that were not properly recorded during the accounting period.
An audit program is a detailed listing of the steps to be taken by an auditor, such as a Certified Public Accountant (CPA), when analyzing transactions to determine the acceptability of financial statements. Major accounting firms may prepare an audit program for each client and require the person who does the work to sign or initial each step performed.
An Automated Teller Machine (ATM) is an electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative or teller.
Book-entry refers to the electronic system of recording ownership of securities instead of issuing physical certificates. This system facilitates easier and more secure transactions within financial markets.
A cash acknowledgment is a notice sent to a cash buyer acknowledging receipt of their order. This notice may include an offer inviting the buyer to increase the purchase order and serves to reinforce positive feelings about the purchase and encourage future orders.
An accounting method where transactions are recorded only when cash is received or paid. This method does not account for debtors, prepayments, creditors, accruals, stocks, and fixed assets.
A transaction requiring that goods be paid for in full by cash or certified check at the point of delivery. Also known as Collect on Delivery with the same abbreviation.
In various financial contexts, the term 'clear' refers to the process of validating and finalizing transactions, whether in banking, finance, or securities markets. This ensures accurate and timely settlements.
A compound journal entry is an accounting entry that affects more than one account, allowing for multiple debits and/or credits in a single transaction. It is commonly used for complex transactions in double-entry bookkeeping.
The Committee on Uniform Securities Identification Procedures (CUSIP) system uniquely identifies financial instruments and facilitates transactions and record-keeping in the securities industry.
A method of recording the transactions of a business in a set of accounts such that every transaction has a dual aspect and therefore needs to be recorded in at least two accounts.
EFTPOS is an abbreviation for Electronic Funds Transfer at Point of Sale, referring to a payment system that allows customers to make payments using electronic methods directly at the place of purchase.
A go-between acts as an intermediary between two people or groups, facilitating communication, negotiation, or transactions to ensure smooth handling of particulars in the relationship. The go-between often has a vested interest in the process.
A ledger account is a record in a ledger where all the financial transactions pertaining to a specific person, item, or activity (such as a debtor or stock item) are documented.
A material fact is a fact that is significant or essential to the issue at hand. In the context of legal proceedings or transactions, it is a fact that could sway a decision or compel the need for full disclosure.
The Official List refers to two primary components within the London Stock Exchange framework: a comprehensive list of all traded securities and a daily record of transactions, dividends, rights issues, prices, and other relevant data.
A payer is an individual or entity that is responsible for the payment of a bill, fees, or other financial obligations. The role of the payer is critical in transactional and service delivery contexts within various economic sectors.
Payment in advance, also known as prepayment, is a transaction in which a payment for goods or services is made before the actual delivery. It is often used to mitigate credit risk or secure services and goods ahead of time.
A payment method refers to the means of payment employed by a customer when making a purchase or settling an invoice. Common payment methods include cash, check, money order, or credit card.
A payment on account is an advance payment or part payment towards an outstanding balance or debt, typically not linked to any specific invoice. It is often used in ongoing business relationships where frequent transactions occur.
A point-of-sale (POS) system is a combination of hardware and software that allows retail businesses to conduct and manage sales transactions effectively, often replacing traditional cash registers.
Accounting records that are sufficient to show and explain an organization's transactions, enabling a company to disclose its financial position accurately and comply with statutory regulations.
Realized profit or loss refers to the profit or loss that has arisen from a completed transaction, typically the sale of goods, services, or other assets. It is recognized legally once the transaction is finalized, regardless of whether cash has been received.
A sales credit note is a document issued by the seller to a customer to cancel, or partly cancel, an invoiced charge. It serves as an acknowledgment of the adjustment and facilitates a refund or a credit towards future purchases.
The unit of account is a fundamental concept in economics and accounting that enables the quantification and comparison of the value of goods, services, and transactions, as well as the standardization of a country's currency.
A substantive test in an audit to verify that the underlying records accurately represent the transactions entered into by the audited business.
