| A | B |
|---|
| Fiscal year | An accounting period of twelve months. |
| Invoice | A form describing the goods or services sold, the quantity, and the price. |
| Slide error | accidental misplacement of a decimal point in an amount. |
| Memorandum | A form on which a brief message is written describing a transaction. |
| Trial balance | proof of the equality of debits and credits in a general ledger. |
| Worksheet | a columnar accounting form used to summarize the general ledger information needed to prepare financial statements. |
| Proving the ledger | Adding all debit balances and all credit balances of ledger accounts and then comparing the two totals to see whether they are equal. |
| Posting | information from a journal entry to a ledger account. |
| Correcting entry | an entry made when a mistake made in a journal entry is discovered after posting. |
| Journal | A chronological record of transactions in a business. |
| Source document | A paper prepared as evidence that a transaction occurred. |
| Business entity | Exists independently of its owner's personal holding |
| Capital | Money supplied by investors, banks, or owner's other business |
| Going concern | The assumption that a business entity will continue to operate for an indefinite time |
| Assets | Property or items of value owned by a business |
| Accounts receivable | The total amount of money owed to a business |
| Account | Subdivision under the three sections of the accounting equation used to summarize increases and decreases in assets, liabilities, and owner' end of line s equity |
| Equity | The total financial claims to the assets, or property, of a business |
| On account | When a business or individual buys an item on credit |
| Accounts payable | The amount of money owed to the creditors of a business |
| Liabilities | The claims of creditors to the assets of the business |
| Owner's equity | Owner's claims to the assets of the business |
| Business transaction | A business event that causes a change in the assets, liabilities, or owners equity of a business |
| Accounting equation | Assets = liabilities + owner's equity |
| Chart of accounts | A list of all the accounts and their assigned account numbers, used in journalizing transactions. |
| Credit | An entry to the right side of the T account. |
| Ledger | A book or file containing a separate page for each business account |
| T account | An account shaped like a "T" that is used for analyzing transactions. |
| Revenue | Income earned from the sale of goods and services |
| Double-entry accounting | A financial record-keeping system in which each transaction affects at least two accounts |
| Normal balance | The increase side of an account |
| Expense | The cost of goods and services that are used to operate a business |
| Withdrawal | The removal of assets from the business by the owner for personal use. |
| Debit | An amount entered on the left side of the T account. |
