Accounting Word Bank
Source Document
A business paper from which information is obtained for a journal entry
Retail Merchandising Business
A business that sells to those who use or consume the goods
Outstanding Check
A check issued by a company and recorded on its books but not yet paid by its bank.
Cancelled Check
A check that has been paid by the bank.
Bounced Check
A check that is written for more than the amount of money in a checking account.
Postdated Check
A check with a future date
Automated Teller Machine
A computer terminal that allows a withdrawal of cash from an account, ATM
Worksheet
A computerized spreadsheet
Expense
A decrease in owner's equity resulting from the operation of a business
Social Security Tax
A federal tax that supports elderly, disabled, or orphaned citizens.
Commission
A fee that a salesperson receives upon completion of a sale
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Invoice
A form describing the goods or services sold, the quantity, the price, and the terms of sale
Memorandum
A form on which a brief message is written describing a transaction
Chart of Accounts
A list of accounts used by a business
General Ledger
A permanent record organized by account number.
Check Register
A personal record book used to keep track of all transactions.
Time Card
A record of the times an employee arrives at work and leaves each day.
Vendor
A seller of goods
Receipt
A source document that serves as a record of cash received.
Cash Payments Journal
A special journal used to record only cash payment transactions
Cash Receipts Journal
A special journal used to record only cash receipt transactions
Sales Journal
A special journal used to record sales of merchandise on credit.
Purchases Journal
A special journal used to record the purchase of goods on credit.
Double Entry Accounting
A system where every transaction affects at least two accounts
Reconciliation
A way to balance your account records with your bank or credit union.
Check
A written order for a bank to pay money
Net Income
Also called profit. Calculated as the Revenue minus Expenses
Accounts Receivable
Amounts due from customers for credit sales
Petty Cash
An amount of cash kept on hand and used for making small payments
Liability
An amount owed by a business
Special Endorsement
An endorsement that transfers the right to cash the check to someone else.
Asset
Anything of value that is owned
Liquidity
Availability of resources to meet short-term cash requirements.
Permanent Accounts
Balance sheet accounts whose balances are carried forward to the next accounting period.
Wholesale Merchandising Business
Buys and resells merchandise primarily to other merchandising businesses
Normal Balance
The balance that appears on the increase side of an account.
Double Line
The bottom line in accounting is the double-underlined final figure at the bottom of a column indicating a total profit or loss.
Equity
The difference between assets and liabilities
W4 form
The form that determines the percentage of an employee's pay that will be withheld for federal taxes
Credit
The granting of a loan and the creation of debt; any form of deferred payment
Debit
The left side of an account
Single Line
The line under the subtotal
Posting
The procedure of transferring journal entry amounts to the ledger accounts.
Accounting
The process of keeping and interpreting financial records
Journalizing
The process of recording business transactions in a journal.
Capital
wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing
Drawing
Debit
Proving Cash
Determining that the amount of cash agrees with the accounting records
Salaried Employees
Employees paid on a yearly basis, not hourly
Component Percentage
Expresses each item on a particular financial statement as a percentage of a single base amount.
Revenue
Income
Current Assets
Items that can or will be converted into cash within one year.
Adjusting Entries
Journal entries recorded to update general ledger accounts at the end of a fiscal period
Closing Entries
Journal entries used to prepare temporary accounts for a new fiscal period
1,000.00
One thousand
Bank Check
Paper form of payment used to pay a stated amount of money to the bearer or named party.
Restrictive Endorsement
Restricts or limits the use of a check.
Calculator Tape
Source document for daily sales
Heading
Tells the reader what the section is about
Markup
The amount added to the cost of merchandise to establish the selling price
Owner's Equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Net loss
When expenses are greater than income
Medicare Tax
a federal tax paid for hospital insurance
Fiscal Period
a period of time covered by an income statement
Money Order
a written order for the payment of a sum to a named individual
temporary Accounts
accounts that are closed at the end of every accounting period. These accounts include revenue, expense, and withdrawal accounts.
Income Statement
financial statement which reports net income or net loss of a company
Blank Endorsement
having no words other than the signature of the endorser
Witholding Allowance
he more allowances claimed, the less income tax will be withheld from a paycheck. The fewer allowances you claim, the more income tax will be withheld from each paycheck.
W2 form
states how much income was earned and how much tax was withheld
Net Pay
the total earnings paid to an employee after payroll taxes and other deductions