Accounting Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

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.

Accounting:

Accounting is an information system that measures, processes, and communicates financial information about an identifiable economic entity to permit users of the system to make informed judgments and decision.

Accounting has been defined by the AICPA as “The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof."

Accounting Equation:

Algebraic expression of financial position; assets=liabilities+owner’s equity; also called balance sheet equation.

Accounting Principles/Concepts:

The standards, rules, guidelines and industry-specific requirements for financial reporting.

Accounting Cycle:

Series of the steps which are repeated every reporting period. Includes, analyzing and recording transactions, posting entries, adjusting and closing the accounts, and preparing the financial statements.

Accounts Payable:

It is the money due to the suppliers who has supplied goods on credit. It is a current liability to the company.

Accounts Receivable:

It is the money to be received from the customer which arises because of the credit sale made to the customer. It is the part of short term liquid asset (current asset)

Accrual Accounting:

A method of recording financial transactions of an enterprise in the period in which those transactions or events occur rather than only in the period in which the cash is received or paid by the enterprise.

Accrued Expenses:

Expenses that have been incurred but are not recognized in the accounts, necessitating and adjusting entry; unrecorded expenses; a liability account....