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TERMINOLOGY

Account   A record in the general ledger that is used to collect and store similar information.  For example, a company will have a Cash account in which every transaction involving cash is recorded. A company selling merchandise on credit will record these sales in a Sales account and in an Accounts Receivable account.

Accounts Payables   This current liability account will show the amount a company owes for items or services purchased on credit and for which there was not a promissory note. This account is often referred to as trade payables (as opposed to notes payable, interest payable)

Accounts Receivables   The combined amount of the debit balance in the current asset account  and the credit balance in the contra asset account Allowance for Doubtful Accounts. The difference between the balances in these two accounts is an approximation of the amount of the accounts receivable that is likely to turn to cash (be collected).

Bookkeeping The recording of a company's transactions into the accounts contained in the general ledger. It is usually associated with the accounting tasks prior to the preparation of the trial balance.

Customized Statements   A financial statements (along with the income statement and balance sheet). The statement of cash flows reports the sources and uses of cash by operating activities, investing activities, financing activities, and certain supplemental information for the period specified in the heading of the statement.

On-Line Bookkeeping   With the arrival of computers and accounting software, bookkeeping errors decreased and efficiency increased. For example, the accounting software will refuse a journal entry if the debit amount entered does not equal the credit amount entered. Further, because journal amounts are posted electronically and account balances are calculated electronically, the potential for human error in these tasks is eliminated. As an example of how bookkeeping has become more efficient, consider that the following tasks now occur simultaneously when a credit sale is processed with accounting software. At large companies, the bookkeeping function is likely to be divided among a number of clerking specialists, such as accounts payable clerks, accounts receivable clerks, payroll clerks, and accounting clerks, each of whom use the accounting software to carry out their specific responsibilities.

Payroll Withholdings   The amounts withheld for employees' checks for Social Security tax, Medicare tax, federal income tax, state income tax, and voluntary deductions such as United Way, union dues, 401(k) contributions, employee's portion of health insurance.

QuickBooks   QuickBooks is the most commonly used small-business accounting and  management software in the US. It is made by Intuit.

Reconciliations   A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies. Since there are timing differences between when data is entered in the banks systems and when data is entered in the individual's system, there is sometimes a normal discrepancy between account balances. The goal of reconciliation is to determine if the discrepancy is due to error rather than timing.

For more information on terms and definitions please visit this link:

 http://www.accountingcoach.com/accounting-terms/accounting-dictionary/index.html

   
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