Accounting Business Terms

Question 1

Accounts payable

Answer 1

Amounts due to vendors or suppliers for goods or services received that have not been paid for.

Question 2

Accounts Receivable

Answer 2

the funds that customers owe your company for products or services that have been invoiced.

Question 3

Aging Report

Answer 3

a report of overdue invoices, accounts receivable, or unused credit memos by periodic date change.

Question 4

Asset

Answer 4

any resource that a business owns or controls.

Question 5

Balance Sheet

Answer 5

a financial statement that reports a company’s assets, liabilities, and shareholder equity.

Question 6

Bank Statement

Answer 6

an official summary of financial transactions occurring within a given period for each bank account held by a person or business with a financial institution.

Question 7

Business Transaction

Answer 7

a financial transaction between two or more parties that involves the exchange of goods, money, or services.

Question 8

Chart of Accounts

Answer 8

an index of all the financial accounts in the general ledger of a company.

Question 9

Check Stub

Answer 9

a paper document attached to a physical check or included in a wages envelope.

Question 10

Checkbook Reconciliation

Answer 10

making sure the records you’ve kept for all your spending and income match what the bank says on your physical or online statement

Question 11

Checkbook Register

Answer 11

a document or statement that is used to record check payments and other financial transactions

Question 12

Closing Entries

Answer 12

a journal entry made at the end of the accounting period whereby data are moved from temporary accounts to permanent accounts.

Question 13

Cloud Accounting

Answer 13

a system that allows multi-user access and safe online or remote server storage.

Question 14

Deposit Ticket

Answer 14

small paper form that a bank customer includes when depositing funds into a bank account.

Question 15

EFT

Answer 15

electronic funds transfer’. So, it refers to any payment that’s processed electronically. For example, credit card payment processing is a form of EFT

Question 16

Entrepreneur

Answer 16

someone who is the directing force behind a business venture

Question 17

Equity

Answer 17

method of accounting whereby a corporation records a portion of the undistributed profits for an affiliated entity holding.

Question 18

Expense

Answer 18

the money spent and the costs incurred by a company in pursuing revenue.

Question 19

Fiscal Year

Answer 19

a period of 12 months that a company uses for its accounting purposes;

Question 20

General Ledger

Answer 20

an accounting record of all financial transactions in your business.

Question 21

Income/Revenue

Answer 21

“revenue” refers to the total amount of money a company generates before removing any expenses, “Income”, on the other hand, is equal to revenues minus the costs of doing business, such as depreciation, interest, taxes, and other expenses

Question 22

In-Transit

Answer 22

checks or other non-cash payments that a company received and recorded in its accounting system, but which have not yet been cleared by its bank

Question 23

Journal Entries

Answer 23

a record of the business transactions in the accounting books of a business

Question 24

Liability

Answer 24

money owed to buy an asset

Question 25

P.O.S.

Answer 25

a place where a customer executes the payment for goods or services and where sales taxes may become payable

Question 26

Profit Margin

Answer 26

the percentage of sales that a business retains after all expenses have been deducted.

Question 27

Purchase Discount

Answer 27

a deduction that a payer can take from an invoice amount if payment is made by a certain date.

Question 28

Purchase Return

Answer 28

when the buyer of merchandise, inventory, fixed assets, or other items sends these goods back to the seller

Question 29

Sales Discount

Answer 29

the financial recording of reducing the sales price due to early payment.

Question 30

Sales Return

Answer 30

The seller records this return as a debit to a Sales Returns account and a credit to the Accounts Receivable account

Question 31

Sales Tax Liability

Answer 31

keeps track of the sales tax collected from the customers on behalf of the governing tax authority

Question 32

Sales Tax Payable

Answer 32

a liability account in the balance sheet that keeps track of the sales tax collected from the customers on behalf of the governing tax authority.

Question 33

Trial Balance

Answer 33

a list of all the general ledger accounts contained in the ledger of a business.

Question 34

Vendor

Answer 34

a person or business that supplies goods or services to the company.