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BUSINESS FINANCING Accounting Terms: A Quick Reference Guide For more information, contact: The Business Link Edmonton: 100 – 10237 104 Street NW Edmonton, Alberta T5J 1B1 Calgary: 250 – 639 5 Avenue SW Calgary, Alberta T2P 0M9 Tel.: 1 800 272-9675 Fax: 780 422-0055 (Edmonton) 403 221-7817 (Calgary) E-mail: buslink@cbsc.ic.gc.ca Website: www.cbsc.org/alberta A Member of the Canada Business Network
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ACCOUNTING TERMS – A QUICK REFERENCE GUIDE (03/06) 2
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ACCOUNTING TERMS – A QUICK REFERENCE GUIDE (03/06) 2 Accounting Terms – A Quick Reference Guide The purpose of this terminology list is to help individuals become familiar with terminology needed by a business when working with manual or computerized accounting. The following list is very basic and does not cover all the terms encountered in accounting: A Account Each separate category of asset, liability, equity, revenue or expense for which transactions are recorded separately. An account can have a debit or credit balance. Account records are usually kept as separate pages in a book called a ledger. Accounts are sometimes called ledger accounts. Accounting The process of measuring, recording, classifying, summarizing, communicating and interpreting financial data. Accounting Equation The span of time covered by an income statement. One year is the accounting period for most financial reports, however financial statements are also prepared by companies for each quarter or each month of the year. Accounts Payable Money owed by the business for goods and services provided by its suppliers. An Accounts Payable Ledger contains the individual ledger accounts of all creditors. (A subdivision of current liabilities.) Accounts Receivable Money owed to the business by someone to whom the business has given goods and services on credit (or on account.) (A subdivision of current assets.) Accrual Basis of Accounting Records revenue in the period in which it is earned and expenses in the period in which they are incurred. The effect of events on the business is recognized as services are rendered or consumed rather than when cash is received or paid. Accumulated Depreciation A contra-asset account shown as a deduction from the related asset account in the balance sheet. Depreciation taken throughout the useful life of an asset is accumulated in this account. Adjusted Trial Balance A listing of all ledger account balances after the amounts have been changed to include the adjusting entries made at the end of the period. Adjusting Entry (Adjustments) The updating of the ledger account balances at the end of the accounting cycle before financial statements are prepared. Adjusting entries serve to apportion transactions properly between the accounting periods affected and to record any revenue earned or expenses incurred that have not been recorded prior to the end of the period. (Adjustment examples are expired or prepaid expenses or revenues such as insurance, apportionment of unrecorded income, bad debts, depreciation, and other items recorded at the end of the accounting period.)
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This note was uploaded on 06/29/2008 for the course HIST 101 taught by Professor Wormer during the Spring '08 term at École Normale Supérieure.

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ا�تعار�� - Accounting Terms: A...

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