The place where financial entries of a similar nature are recorded, for example the 'Sales' account is where business income goes, the 'Stationery' account is where all pens, paper, staplers etc go. A list of account names is called the Chart of Accounts.
Numbers assigned to accounts according to the chart of accounts.
The person who sorts and enters financial data to a bookkeeping system. People often inter-change bookkeeper and accountant to mean the same thing. Also refers to the person who does the annual financial statements and tax calculations.
The process of sorting and entering financial data into a bookkeeping system. Also refers to the finalizing of end of year accounts, producing financial statements and calculating tax payable by a certified practicing accountant.
The double entry method of bookkeeping is based on the accounting equation, which is: equity = assets less liabilities
Accounts Payable (A/P)
Unpaid supplier invoices and bills (that is money owed by the business to other businesses) are grouped under Accounts Payable - 'AP' for short - and are found on the balance sheet as a liability. Once a bill is paid it is removed from this group.
Accounts Receivable (A/R)
Unpaid sales invoices (that is money owed to the business by customers) are grouped under Accounts Receivable - 'AR' for short - and are found on the balance sheet as an asset. Once the customer pays their invoice it is removed from this group.
An accounting system in which revenue is recognized only when earned and expense is recognized only when incurred.
An expense that has occurred but the transaction has not been entered in the accounting records. Accordingly an adjusting entry is made to debit the appropriate expense account and to credit a liability account such as Accrued Expenses Payable or Accounts Payable.
Indicates the amount of the intangible asset that has been consumed over time.
Total depreciation that has been moved to the expense account over the life of the asset.
Automated Clearing House
Additional Paid-In Capital
Amounts paid in beyond the par value of stock.
Also called Adjusting Journal Entries; journal entries made at the end of an accounting period in order that the accounts will reflect the correct balance in the financial statements.
Associate of the Institute of Certified Bookkeepers
Adjusted Journal Entry
Articles of Copartnership
The written agreement among the partners that contains provisions on the formation, capital contribution, profit and loss distribution, admission, and withdrawal of partners.
Articles of Incorporation
A charter submitted to the state by individuals wishing to form a corporation and containing significant information about the proposed business.
1. Properties owned that have monetary value. 2. Items of value owned by a business. Assets are found on the balance sheet and include cash in the bank accounts, cash in petty cash box, accounts receivable, equipment, land and buildings, vehicles.
Shares of stock that a corporation is permitted to issue (sell) under its articles of incorporation.
A means of presenting large quantities of numbers in summary form.
An electronic copy of the financial data. This could be either to a cd disc, usb drive or some sort of cloud storage. Backups are vital to preventing loss of data if the computer crashes. The last thing you want to do is spend hours re-entering all the transactions for the previous months and re-do the bank reconciliations and everything else.
These are sales invoices that have been written off because the payments are overdue and never likely to be paid. Sales invoices are only written off after some effort to retrieve the funds including going through debt collection agencies. Bad debts are expensed in the accounts.
A statement that reconciles the difference between the bank’s balance and the balance of a company’s books.
A balance sheet report shows the business owners and managers how much equity is in the business, how many assets the business owns, and what the business owes in liabilities. The balance sheet falls in line with the accounting equation.
The secure financial institution where businesses deposit their earnings and from which they pays their bills. Banks provide business advice and can advances loans to businesses for growth.
A report which the bank produces listing in date order all the money received and all the money paid out of the bank account, ending with the balance of cash in the account.
Taking cash and checks to the bank to deposit into the business bank account.
Bookkeeper Business Launch
A billable expense is a product or service that you, as the business owner, purchases on behalf of a customer or client for the purpose of performing work. It’s called a “billable expense,” because it’s just that: an expense that you can bill. You initially incur the expense because you purchase it on behalf of the customer or client. Later, however, the customer should send you payment for the amount of the expense.
Invoicing customers for goods or services they have purchased from the business.
Consists of only the name of the endorser on the back of the check.
Board Of Directors
Individuals elected by the common stockholders of a corporation to represent the stockholders and to establish the policies of the corporation. The board of directors appoints the officers of the corporation and declares dividends for the common and preferred stock.
A form of long-term debt in which the corporation agrees to pay interest periodically to repay the principal at a stated future date.
Book Value Per Share
The amount that would be distributed to each share of stock if a corporation were to be dissolved.
A trained and qualified person who does the bookkeeping process mentioned above.
The process of collating, recording and reporting on the financial transactions carried out by a business.
A bookkeeping cycle is usually based from the 1st day of the month to the last day of the month, and repeats every month. Bank reconciliations are done to the end of the month, financial reports produced for the month, sales tax and paye tax calculated for the month. The month end is ‘closed off’ and financial transactions for that month should not be changed in any way except by reversing/correcting journals and only carried out in the next month. This goes on for 12 months until the end of the financial year when all the data is sent to a chartered accountant.
The financial plan in which a business decides what it estimates it will earn in the year ahead, what those estimated earnings will be spent on, and then comparing/monitoring the actual figures against this plan.
Checks that have been paid by the bank during the month and returned to the depositor.
Gives an issuing stock company the right to redeem stock at a later date for a predetermined price.
What an individual or business is worth. ALso known as owner’s equity.
The account that shows the par value of the stock issued by the corporation.
The main book in which is recorded all the funds moving in and out of the business through the bank account. The cash book always contains the following information for all of these transactions date, amount, description of transaction, bookkeeping account as per chart of accounts and reference .
Cash Disbursements Journal
A special journal used to record transactions involving cash payments.
Cash on Hand
Sometimes called Petty Cash--the cash a company keeps at the store for cash purchases and sales.
Cash Receipts Journal
A special journal used to record transactions involving cash receipts.
A check whose payments has been guaranteed by the bank.
Chart of Accounts
The list of accounts set up in a bookkeeping system into which all the financial transactions are categorized. The main categories are Assets, Liabilities, Equity, Income, Cost of Goods Sold and Expenses.
Chartered Practicing Accountant (CPA)
A person who trains and qualifies in advanced financial care of a business, particularly specializing in collating and preparing annual financial reports, income tax preparation and filing, and providing advanced advice on how to improve and grow businesses in accordance with tax laws and other legal implications. CPA’s can provide support to and work along with bookkeepers to ensure all the financial data is being entered into the bookkeeping system correctly to make tax preparation easier.
Special pre-printed slips of paper in book format produced by the bank. These are used by a business to pay their bills in place of cash or instead of internet banking. These notes are completed by the business by entering the date, the name of the person/business being paid and the amount in numeric value and word value. They have to be signed by the authorized signatory of the bank account and usually expire 3 to 6 months after the date issued. It is safe to send cheques in the post, unlike cash which can be stolen.
The bank account on which checks are written or drawn. A bank refers to checking accounts as demand deposits.
An entry made at the end of a fiscal period in order to make the balance of a temporary account.
Closing The Ledger
A process of transferring balances of income and expense accounts through the summary.
Chart of Accounts
Close of Business
A term used to describe the allocation of a transaction amount to an account in the chart of accounts.
COGS (Cost of Goods Sold)
COGS--the costs for items and labor directly used to produce the goods and services that are the primary source of revenue for the company.
Combined Cash Journal
The journal in which all cash transactions are recorded.
The part of the capital stock that does not have a special preferences or rights.
If a payment is made into a bookkeeping account, and then that same payment is paid out of the account for a reason, it is called a contra – the two figures contra each other out i.e. they cancel each other out of the account. Example $200 was paid into the Sales account. The bookkeeper realized that he should have used a different account so he pays the $200 out of the Sales account. This is the contra.
The account in the general ledger that summarizes the balances of a subsidiary ledger.
When a business transfers their bookkeeping records from one accounting software program to another they are ‘converting’ their books. What they do is take the closing balances from the old software and enter them into the new software as opening balances. These are called conversion balances.
Gives the stockholders an option to convert preferred stock into common stock.
A business organized by law and viewed as an entity and separated from its owners and creditors.
Certified Public Accountant
Current Portion of Long Term Debt
Credits can be found on the right hand side of the double entry method of bookkeeping. A credit entry decreases assets and expenses, and increases income, liabilities and equity. Also, money that is owed by a business to a supplier/vendor is called credit. When you want to open an account with a supplier you would most likely fill in what is called a Credit Application. Credit is also money that is owed to a bank on a credit card. .
A document that provides a refund to a customer for goods returned or sold at the wrong price.
The person or business to whom our business owes money for purchases made.
A category of assets on the balance sheet that represents cash and assets that are expected to be converted into cash within one year.
A category of liabilities on the balance sheet that represents financial obligations that are expected to be settled (paid) within one year.
A debit balance is found on the left hand side of double entry bookkeeping. A debit entry increases assets and expenses, and decreases income, liabilities and equity.
A customer that owes your business money.
The financial information found inside the bookkeeping system.
When money (cash or checks) is paid into a bank account it is called a deposit.
The bit of paper that accompanies the cash or cheques and which details what bank account the funds should be paid into, the amount of the deposit and the date of the deposit.
Most assets belonging to a business decrease in worth over time due to wear and tear and daily use – this is depreciation. The value that is used to depreciate the assets is calculated with special rates set by the tax department. It is usually a percentage of the cost price, less previously calculated depreciation. Depreciation can be claimed as a business expense to reduce income tax.
A purchase that can be claimed as a business expense is called a deductible expense because it has the effect of reducing the business profit, therefore reducing the amount of income tax owed to the government. A nondeductible purchase is one that cannot be used to reduce the profit and tax such as when the owner uses business funds to buy something for personal use.
Deposit In Transit
Cash deposited and recorded by the company, but too late to be recorded by the bank.
The cost of a fixed asset distributed over its entire estimated lifetime.
The section of a financial transaction that describes the item or service purchased or sold.
Discounted notes receivable
A term used to describe notes receivable sold to a bank and being held liable for maturity if the marker defaults.
Double Entry Accounting
An almost universal system that produces equal debit and credit entries for every party.
A document that contains information about a product sold from one business to another, such as a delivery docket.
The method of bookkeeping in which all financial transactions are entered twice – once as a debit and once as a credit. All the debits need to equal the same as the credits. If they don’t it is called being out of balance and the error will need to be found.
An order by the seller to the buyer stating that the buyer must pay a certain amount of money to a third party.
Funds withdrawn from a business by the business owner for their personal use.
A stub attached to an employee’s payroll check that provides the employee with a record of the amount earned and a detailed list of deductions.
All financial transactions input to the bookkeeping system are called entries.
End of Month
The bookkeeping cycle is usually based on one month, every month. At the end of the month, there are various steps a bookkeeper needs to take to close off the month, such as - Reconciling the bank account to the last day of the month, making sure all sales have been issued on invoice to customers, checking that all supplier invoices dated to the last day of the month are entered into the system, performing various checks on the various bookkeeping accounts to ensure information has been coded to the right place and all is balancing, making sure the various sales tax and paye tax has been calculated and reported and paid to the government.Depending on the size of the business, it can take a bookkeeper several weeks into the following month to get the previous month finalized and closed off, after which no changes should be made other than with journals in the current month.
The placing of a signature on the back of a check that is to be deposited or cashed.
Endorsement In Full
A type of endorsement that states that the check can be cashed or transferred only on the order of the person named in the endorsement.
End of the month
The act of spending money or time, and it may also be the money or time spent.
The decrease in capital caused by the business’s revenue-producing operations.
This is found on the balance sheet and it shows how much the business owner has contributed to the business from personal funds (capital) and how much he has withdrawn from the business for personal use (drawings). Another terms for this section is called the Current Account.
Most purchases made by a business are called an expense. Expenses are found on the profit and loss report and can be used to reduce the amount of tax owed to the government.
Most accounting software programs allow the bookkeeper to export information to excel or pdf for various uses. 1) In many cases it is possible to export creditor payments from the software and upload directly to the bank for payment so that the account and details do not have to be manually entered into the bank – a real time saver if you have a lot of bills to pay. 2) The export of financial data to excel allows flexibility for developing financial reports based on the bookkeeper’s preference rather than being stuck with the parameters set by the software.
Fixed Asset- Assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.
Financial Accounting Standards Board
Federal Unemployment Tax
A tax paid by the employers only. Used to supplement state unemployment benefits.
Reports that are produced by a tax accountant at the end of the financial year based on all the data entered to the bookkeeping system by the bookkeeper. These reports indicate how well the business is or is not doing, what the business is worth, and are used to calculate income tax due to be paid to the government.
Filing is the process of putting away documents in a systematic method. Also, when a bookkeeper says “I am filing the sales tax” they mean they are sending a report to the government on how much sales tax the business has to pay for the month.
The physical or digital place in which a business puts all its documents in a specialized method.
A period of time covered by the entire accounting cycle, usually consisting of 12 consecutive months.
The recording in pencil of the temporary total of one side of a T account.
The money or value of money involved in all business transactions within the business or at the bank.
Generally Accepted Accounting Principles
Gains and Losses
This usually comes up when there are foreign currency transactions to be dealt with. When a business is given an invoice by an overseas supplier in a foreign currency, it has to be converted into the local currency when being entered into the accounts. When it is time to make the payment the local currency has to be converted into the foreign currency by the bank. The date at which it is entered will have a different exchange rate to the date when it is paid because exchange rates fluctuate on a daily basis. These different exchange rates cause financial gains or losses that need to be identified in the accounts. The gains occur when the business has to pay less to the supplier than the original conversion;The losses occur when the business has to pay more to the supplier than the original conversion.
The rate, arrived at through negotiation between the employer and the employee, at which employees are paid.
This is calculated by taking the business income and deducting the cost of sales. If the cost of sales is more than the income a Gross Loss results.
Buying equipment such as a computer by paying it off through a finance company. At the end of the lease period the business will have the option of making a final payment to own it, or they can return the equipment and upgrade to a newer model. The new model can be paid off through the finance company, so the whole process starts again.
Data brought into the bookkeeping records through a digital import. This could include bank transactions which can be downloaded from the bank in a special format such as CSV, or it could be contact names and addresses from another program such as excel. Import can also mean to bring into the country stock purchased overseas.
A fund established for a fixed petty cash amount and periodically reimbursed by a single check for amounts expended.
Money that is earned by a business through the sale of products or services.
A summary of the revenue, expenses, and net income of a business entity for a specific period of time. Also known as a profit and a loss statement.
Used to compare business activities during one time period with similar activity during another time period.
The term used for entering data into the bookkeeping software.
Money paid for the use of borrowing of money.
Interest -Bearing Note
A note in which the market has agreed to pay the face of the note plus interest.
A percentage of the principal that is paid for the use of money borrowed.
A list of items that a business buys and sells. These items are kept in a store room of some sorts and a strict record kept of the number of items on hand at any given time.
Inventory Quantity Adjustment
After a physical inventory count is conducted, the books need to be adjusted to match the correct count of inventory on hand.
A document that details the sale or purchase of stock, parts or services. The invoice will show the main details such as date, invoice number, quantity, description, cost, total, payment terms. When a business buys the products or services it will receive a purchase invoice and when the business sells products or services it will provide a sales invoice to the customer.
Financial statements can be produced for a bank or loan company at any stage during the financial year but because the financial year has not ended yet they will be called interim reports because they are based on a shorter period than the full year. Banks or loan companies usually require these so they can see how the business is doing before approving a loan to the company – they want to be sure the business has the means to pay back a loan. Interim reports are usually sufficient for this purpose.
Internal Revenue Services (US Taxes)
An entry that is made into the accounts utilizing double entry bookkeeping to make an adjustment to the accounts such as if a correction has to be made. The journal describes which account is being debited and which account is being credited, the date, the reason for the journal and a reference.
Each account on the chart of accounts has a ledger page. The ledger page lists all the entries made against the account either as a debit or a credit. The ledger page is totaled at the end of every month.
This is found on the balance sheet. Liabilities are made up of debts that the company owes to other businesses and includes accounts payable, loans and credit card balances.
Long Term Liabilities
Debts that do not have to be paid immediately but are usually paid over a long period of time, normally more than 1 year.
A business can buy asset with a loan from a bank or finance company. Loans are recorded as a liability in the balance sheet.
A loss occurs when the gross profit of a business is less than the expenses the business has to pay to keep the business running. This is usually called a Net Loss.
An individual who signs a promissory note agreeing to make a payment.
Downward adjustments f the selling price. Used to induce customers to buy.
The percent increase in selling price, when cost is used as a base for markup percent.
When a business buys stock to sell they usually increase the price before selling it. This is called a markup. So if Betty buys a bag for $10 and sells it for $15 her markup is $5. Markups are calculated either as a percentage of the price it cost to buy it, or set as a fixed calculation such as doubling the cost price.
Margins are calculated as percentages. One example is the gross profit margin which is based on sales divided by gross profit and the result turned into a percentage. Businesses can chose what margins they should have to be able to earn a profit and based on those margins decide what prices to sell their products to make this happen.
The date a note is to be paid.
The face of the note plus interest accrued until the due date.
The most popular method of averaging a group of values. It is accomplished by adding up the values and dividing their sum by the numbers of values given.
The number that divides a group in half.
Represents the value of goods on hand, either at the beginning ot the end of the accounting period.
Merchandise Inventory Turnover
The number of times the average inventory is sold during a year. This ratio shows how quickly the inventory is moving.
Term standing for Magnetic Ink Character Recognition. These are numerical characters that can be read by both computers and individuals.
The number that occurs most frequently in a series of figures.
The increase in capital resulting from profitable operations of the business. It is the excess of revenue over expenses for the accounting period.
The amount of pay remaining for issuance to an employee after deductions have been taken from the individual's gross pay.
All purchases less returns and purchase discounts.
Total amount of sales minus returns and sales discounts.
A balance that is zero or 0.00 is said to be a nil balance.
The result after taking expenses away from the Gross Profit or Loss.
The liability account in which a company records the loans or promissory notes issued for the business.
A product that is purchased or sold but whose quantity is not tracked; typically it is an item that is only aa part of the final product sold by the company. Example: a company that sells honey purchases jars in which to sell their final product. The jar is a non-inventory item.
Opening Balance Entry (or Equity)
The opening balances are the values found on the first day of the financial period. So for example, if your financial year starts on 1 January, the balances at the start of that day in the cash book or the ledgers are the opening balances. Opening balances are usually always exactly the same as the closing balances on the day before.
An entry made at the time a business is organized to record the assets, liabilities, and capital of the new firm.
Checks issued by the depositor but not yet presented to the bank for payment.
The number of shares authorized, issued, and in the hands of stockholders.
Funds deposited into the business from the owner, also any expenditures made using the owner’s personal funds.
Earnings that an owner withdraws from the company
Funds that an owner takes out of the company for personal use.
What an individual or business is worth. Also known as capital.
Profit and Loss, officially called the Income Statement.
A stated legal amount often appearing on preferred stock, bonds, and some common stock.
An association of two or more persons to carry on as co-owners of a business for profit.
A bill that is due to be paid is called a payable and is included on the list of accounts payable.
The individual that is to receive money from a negotiable instrument.
Anyone in employment who is paid a wage or salary will have their name on the payroll of the business. The bookkeeper in charge of payroll will ensure that all the relevant details of each employee is entered into the payroll program, will process a pay run on a regular basis to calculate how much each employee will be paid, and will make sure the payments happen on time. The bookkeeper or payroll clerk will also ensure that payee is paid to the government.
Accounting payments of wages, salaries and related payroll taxes.
Payroll Earnings Card
A card that shows payroll data and yearly cumulative earnings, as well as deductions.
Payments related to payroll that a business has withheld from the employees’ paychecks but has not paid yet.
A specially designed form used at the close of each payroll period to summarize and compute the payroll for the period.
Payroll Tax Expense Account.
An account used for recording the employer’s matching portion of the FICA tax and the federal and state unemployment tax.
The relationship between one number and another in terms of hundredths.
Periodic Inventory Count
A system of tracking inventory in which updates are only made periodically.
Sometimes called Cash on Hand--the cash a company keeps at the store for cash purchases and sales.
Point of Sale
Post-Closing Trial Balance.
A trial balance made after the closing entries are completed. Only balance sheet items- that is assets liabilities and capital- will appear on this statement.
The process of transferring information from the journal to the ledger for the purpose of summarizing.
A class of corporate stock that carries certain privileges and right not given to other shares.
Current assets that represent expenses that have already been paid out though were not yet consumed during the current period.
The face amount of the note plus accrued interest.
The initial amount of the loan; the amount needing to be repaid, excluding interest.
Product Sales Revenue
Gross revenue earned from the sale of products and goods.
The difference between income earned and expenses paid. The greater the profit the better for business.
Profit and Loss
Another name for the Income Statement. The title stems from the fact that the statement is profit minus all expenses or losses to the business.
A business owned by one person.
A cash discount allowed for prompt payment of an invoice.
The source document prepared by the seller listing the items shipped, their cost, and the method of shipment.
An account used by the buyer to record the reduction granted by the seller fro the return of merchandise.
QBDT (or QBD)
QuickBooks Online Accountant. This is your account in QBO. Your clients sign up under this account.
When a business needs services or parts they can shop around and ask for suppliers to provide a written cost for the parts or services – this is a quote. The business would chose the supplier who provided the best quote. Quotes are usually only valid for a certain time frame – a few weeks or months.
The relationship of two or more numbers to each other.
All balance sheet items-that is, assets, liabilities and capital having balances that will be carried forward from one period to another.
The process of matching one set of figures or documents with another set of figures or documents. For example, matching the cash book with the bank account and investigating and fixing any differences; or checking that the business has received all the invoices listed on a supplier’s statement and if any are missing phoning the supplier for them.
When payments are received from customers a receipt can be issued to them to confirm the details of the payment received, particularly useful for cash payments – the receipt provides proof of payment. Also, receipts are what everyone gets when shopping with their bank card and swiping the card through the electronic machine at the shop counter. Businesses should keep these receipts in a folder to match them up to the bank statement ensuring an accurate cash book.
Accounts that are due to be paid by the customers of a business are listed on the accounts receivable report. Anything that is receivable means that the business expects to receive money.
A transaction that repeats regularly every week or month for the same amount to the same place is said to be a repeating or recurring transaction.
A refund can be provided to or from another business if bills have been overpaid.
A number or combination of numbers or letters that are used to identify each transaction within the cash book following through to the journals and ledgers. Each financial transaction is allocated a unique reference that can be traced easily through the bookkeeping system.
Think old fashioned checkbook register in which you listed all transactional activity for the checking account; the listing of all transactions in asset or credit card accounts of the business.
An individual who buys something for the business with personal funds can be reimbursed by the business i.e. paid back for that purchase.
A document that is given to a supplier or received from a customer that lists what invoices are included in a payment made.
A type of endorsement that limits the receiver of the check as to the use she or he can make of the funds collected.
The accumulated earnings arising from profitable operations of the business.
The increase in capital resulting from the delivery of goods or rendering of services by business.
Receipt of Goods
The balance of an account after the recording of each transaction.
A salary is a fixed amount paid to an employee for their work. People on salaries do not earn overtime pay like a wage earner when working more than their standard hours.
All items or services sold to customers fall within the sales category.
A reduction from the original price, granted by the seller to the buyer.
Schedule Of Accounts Payable
A detailed list of the amounts owed to each creditor.
Schedule Of Accounts Receivable
A detailed list of the amounts due from each customers.
Share Of Stock
Represents a unit of the stockholders interest in the business.
A bookkeeping system in which all financial transactions only have to be entered once. This is usually within a cash book system and does not utilize journals and ledgers for the process of balancing.
Statement of Cash Flows
Computer programs that are used to keep the financial data (like QuickBooks, Xero, Sage, MYOB etc. or for processing payroll, or for typing up documents and reports (excel and word).
The original document that contains the details of a business transaction.
The book of original entry in which the accountant records specified types of transactions.
State Unemployment Taxes
Taxes to be paid only by employers, with rates and amounts differing among each state.
A report that displays financial information. Examples are Income Statement which is another term for Profit and Loss Report, Statement of Account which a supplier of services or goods provides to their customers which details all the invoices issued to them in a certain time frame (like a month), Bank Statement which is a listing of transactions in and out the bank account.
Statement Of Cash Flow
A cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, invest.ing and financing activities.
The owners of the business.
Shares that a buyer has contracted to purchase at a specific price on a certain date.
A group of accounts representing individual subdivisions of a controlling account.
Any documents that further reinforce the details outlined in source documents, i.e. bank and credit card statements.
An account in the books for transactions to be entered temporarily to confirm more details to ensure it is assigned to the correct or final account.
A form of ledger account that shows only the account title and the debit and credit sides.
A deduction from the income earned by a business or individual. The deduction is paid to the government. The government uses taxes to maintain and run the country.
Consist of revenue, expense and drawing accounts that will have a zero balance at the end of the fiscal year.
Thanks in Advance
The process of taking data from an employee’s timesheet and charging it onto customers. The data is made up of the hours that the employee spent working on something for the customer, a description of the job and any other costs associated with the job.
This is not a true discount but an adjustment of the price. With it, a business can adjust a price at which it is willing to bill goods without changing the list price in a catalog.
The allocation of funds from one account to another.
A transfer of funds from one account to another.
Stock representing shares that have been issued and later reacquired by the corporations.
A two- column schedule that compares that total of all debit balances with the total of all credit balances.
An asset account in the bookkeeping system in which is entered money that has not yet been deposited to the bank. A business might receive cash and cheques from several different customers in one day. The bookkeeper can receive these payments against each individual invoice in the bookkeeping system and receive each payment into the undeposited funds account. The bookkeeper will then total up the payments and write out a deposit slip for the bank with the total and will take that to the bank. Once the bank has placed it into the account and it shows on the bank statement, the bookkeeper can move it in the bookkeeping system from the undeposited funds account to the bank account. Some software has the option of clicking on a ‘transfer’ button and some software will require you to process a journal entry for this to take place.
Uniform Partnership Act
A law used to resolve all contested matters among partners of a partnership.
Authorized shares that have not been offered for sale.
The right of creditors to claim any and all assets of a debtor in satisfaction of claims held against the business of the debtor.
Sometimes called uncleared; checks that have not been deposited to the bank are said to be un-presented. This term is used most often on bank reconciliations to aid in the reconciling of the cash book with the bank account.
A payment made to an employee for the work they do. Wages are usually based on an hourly rate agreed between the employer and employee. Income tax is also usually deducted from the total so the employee receives a net payment. Wages are found on the profit and loss under expenses
When funds are taken out of a bank account they are ‘withdrawn’.
Withholding Exemption Certificate
Known as Form W-4, it specifies the number of exemptions claimed by each employee, allowing the employer to withhold some of the employee’s money for income taxes and FICA taxes.
An amount that will not be paid by a customer can be written off. This just means that an entry is made to the accounts to bring the customer’s account down to zero.
The financial year-end is always busy for a bookkeeper because this is when the accounts for the year need to be finalized and handed over to an accountant to calculate how much tax a business needs to pay to the government. What the bookkeeper needs to do is ensure all bank reconciliations completed, all transaction entries are coded correctly, all supporting paperwork is available and all sales taxes and payed taxes have been processed.