Accounting - process of identifying, measuring, and reporting financial information of an entity Accounting Equation - assets = liabilities + equity Accounts

Payable - money owed to creditors, vendors, etc. Accounts Receivable - money owed to a business, i.e.: credit sales Accrual Accounting - a method in which income is recorded when it is earned and expenses are recorded when they are incurred.
Amortization - Gradual and periodic reduction of any amount, such as the periodic writedown of a BOND premium, the cost of an intangible ASSET or periodic payment Of MORTGAGES or other DEBT.

Asset - property with a cash value that is owned by a business or individual Balance Sheet - summary of a company's financial status, including assets, liabilities, and equity.
Bad Debt - All or portion of an ACCOUNT, loan, or note receivable considered to be uncollectible.

Bookkeeping - recording financial information Cash-Basis Accounting - a method in which income and expenses are recorded when they are paid. Certified Public Accountant (CPA) - ACCOUNTANT who has satisfied the education, experience, and examination requirements of his or her jurisdiction necessary to be certified as a public accountant. Chart of Accounts - a listing of a company's accounts and their corresponding numbers Cost Accounting - a type of accounting that focuses on recording, defining, and reporting costs associated with specific operating functions Credit - an account entry with a negative value for assets, and positive value for liabilities and equity.
Current Asset - ASSET that one can reasonably expect to convert into cash, sell, or consume in operations within a single operating cycle, or within a year if more than one cycle is completed each year.

Current Liability - Obligation whose LIQUIDATION is expected to require the use of existing resources classified as CURRENT ASSETS, or the creation of other current liabilities.

Debit - an account entry with a positive value for assets, and negative value for liabilities and equity.
Dividends - Distribution of earnings to owners of a CORPORATION in cash, other ASSETS of the corporation, or the corporation's CAPITAL STOCK.

Depreciation - recognizing the decrease in the value of an asset due to age and use Double-Entry Bookkeeping - system of accounting in which every transaction has a corresponding positive and negative entry (debits and credits) Equity - money owed to the owner or owners of a company, also known as "owner's equity" Financial Accounting - accounting focused on reporting an entity's activities to an external party; ie: shareholders Financial Statement - a record containing the balance sheet and the income statement Fixed Asset - long-term tangible property; building, land, computers, etc. Financial Accounting Standards Board (FASB) - Independent, private, non-governmental authority for the establishment of ACCOUNTING principles in the United States. General Ledger - a record of all financial transactions within an entity Income Statement - a summary of income and expenses. Intangible Asset - Asset having no physical existence such as trademarks and patents. (See TANGIBLE ASSET.) Job Costing - system of tracking costs associated with a job or project (labor, equipment, etc) and comparing with forecasted costs Journal - a record where transactions are recorded, also known as an "account" Liability - money owed to creditors, vendors, etc. Letter of Credit - Conditional bank commitment issued on behalf of a customer to pay a third party in accordance with certain terms and conditions. The two primary types are commercial letters of credit and standby letters of credit.

Liquid Asset - cash or other property that can be easily converted to cash Loan - money borrowed from a lender and usually repaid with interest Net Income - money remaining after all expenses and taxes have been paid Non-operating Income - income generated from non-recurring transactions; ie: sale of an old building Note - a written agreement to repay borrowed money; sometimes used in place of "loan" Operating Income - income generated from regular business operations Payroll - a list of employees and their wages Revenue - total income before expenses. Reconciliation - Comparison of two numbers to demonstrate the basis for the difference between them. Ratio Analysis - Comparison of actual or projected data for a particular company to other data for that company or industry in order to analyze trends or relationships. Retained Earnings - Accumulated undistributed earnings of a company retained for future needs or for future distribution to its owners. Return on Investment (ROI) - Ratio measure of the profits achieved by a firm through its basic operations. An indicator of management's general effectiveness and efficiency. The simplest version is the ratio of NET INCOME to total ASSETS. Single-Entry Bookkeeping - system of accounting in which transactions are entered into one account. Statement of Cash Flows - A statement of cash flows is one of the basic financial statements that is required as part of a complete set of financial statements prepared in conformity with generally accepted accounting principles. It categorizes net cash provided or used during a period as operating, investing and financing activities, and reconciles beginning and ending cash and cash equivalents. Tangible Asset - ASSETS having a physical existence, such as cash, land, buildings, machinery, or claims on property, investments or goods in process. (See INTANGIBLE ASSETS.) Tax - Charge levied by a governmental unit on income, consumption, wealth, or other basis.