Terminology of Accounting and Bookkeeping Records

Terminology of Accounting and Bookkeeping Records

Following are the terminology of accounting as well as bookkeeping:

 

Chart of Accounts

Journals

It denote to book of original entry where primary business transactions are first entered into the accounting system.

 

Specialized Journals

Journals used to initially record special types of transactions such as sales, cash disbursements, and cash receipts in their own journal.

 

General Ledger

A book containing the accounts and balances for all a business’s assets, liabilities, equity, revenue, and expense accounts.

 

Subsidiary Ledgers

A single record makes to record the individual items concerning to a single general ledger account. Examples include an accounts receivable and account payable ledger.

 

Trial Balance

It is used ensure that books are balanced such as debit is equal to credit or not. By listing of all the accounts from the general ledger in the dollar amount for debit and credit balance of each.

 

Worksheets Forms

It is used to summarize all the information necessary to complete the end of period financial reports and prepare other financial analysis.

 

Invoice

Invoice is business document which shows the names and addresses of the buyer and the seller with description of item along with its unit price and quantity, mentioning date of event of transaction and the terms and condition of sale unit price, and total price of goods purchased or also sold the method of delivery mentioned.

Selling business refers to this document as a sales invoice.

Buying business refers to this document as supplier invoice.

 

Receiving Report

It is document which mention the quantities and condition of goods received from the seller.

 

Sale Order

A document originated by the seller listing the goods and/or services ordered by purchase by a customer and other information such as prices and delivery dates.

 

Purchase Order

A document originated by the purchaser (buyer) requesting the supplier to ship good or perform services.

 

Cheque Book

Formal records of all cheque written, deposits, bank charges, and miscellaneous charges and credits.

 

Cheque

A written order directing a bank to pay cash from the account of the writer (drawer) of the check.

 

Bank Reconciliation

The process of bringing the checkbook and bank statement balances into agreement.

 

Bank Statement

A copy of the bank’s record of the business’s account showing the balance of account at the beginning of the month, the deposits, and withdrawals (mostly cheque) made during the month, service charges, and the balances at the end of the month.

 

Financial Statement

Accounting reports prepared periodically to inform the owner, creditors, and other interested parties as to the financial condition and operating results of the business. The four basic financial statements are:

  1. Balance Sheet
  2. Income Statement
  3. Capital Statement
  4. Statement of Changes in Financial Position

 

Balance Sheet

The financial statement which shows the amount and nature of business assets, liabilities, and owner’s equity (capital) as of a specific point in time. It is also called as a statement of financial position.

 

Income Statement

The financial statement that summarizes revenues and expenses for a specific period, usually a month or a year. This statement is also called a profit and loss statement or an operating statement.

 

Capital Statement

It is financial report which summarize all the changes occurred in the owner’s equity during specific time.

 

Statement of changes in Financial Position

It reports the sources and uses of cash and working capital for a specific period.

 

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1 Response

  1. December 27, 2021

    […] You May Also Read: Terminology of Accounting and Bookkeeping Records […]

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