(See related pages)
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| Account | A place or location within an accounting system in which the increases and decreases in a specific asset, liability, or equity are recorded and stored. (See page(s) 86) |
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| Account balance | The difference between the increases (including the beginning balance) and decreases recorded in an account. (See page(s) 89) |
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| Accounting cycle | The steps repeated each reporting period for the purpose of preparing financial statements for users. (See page(s) 86) |
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| Accounts payable | Obligations that arise when a promise to pay later is made in connection with purchases of merchandise, supplies, or equipment. (See page(s) 87) |
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| Accounts receivable | When services are performed for or goods are sold to customers in return for promises to pay in the future, an account receivable is recorded. These transactions are said to be on credit or on account. Accounts receivable are increased by services performed or goods sold on credit and decreased by customer payments. (See page(s) 87) |
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| Balance column ledger account | An account with debit and credit columns for recording entries and a third column showing the balance of the account after each entry is posted. (See page(s) 101) |
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| Chart of accounts | A list of all accounts used by a company; includes the identification number assigned to each account. (See page(s) 92) |
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| Compound journal entry | A journal entry that affects at least three accounts. (See page(s) 99) |
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| Credit | An entry that decreases asset, expense, and owner's withdrawals accounts or increases liability, owner's capital, and revenue accounts; recorded on the right side of a T-account. (See page(s) 90) |
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| Debit | An entry that increases asset, expense, and owner's withdrawals accounts or decreases liability, owner's capital, and revenue accounts; recorded on the left side of a T-account. (See page(s) 90) |
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| Double-entry accounting | An accounting system where every transaction affects and is recorded in at least two accounts; the sum of the debits for all entries must equal the sum of the credits for all entries. (See page(s) 90) |
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| General Journal | The most flexible type of journal; can be used to record any kind of transaction. (See page(s) 99) |
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| Journal | A record where transactions are recorded before they are recorded in accounts; amounts are posted from the journal to the ledger; also called the book of original entry. (See page(s) 99) |
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| Journalizing | Recording transactions in a journal. (See page(s) 99) |
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| Ledger | A record containing all accounts used by a business. (See page(s) 87) |
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| Normal balance | The debit or credit side on which an account increases. For example, assets increase with debits, therefore the normal balance for an asset is a debit. Revenues increase with credits, therefore a credit is the normal balance for a revenue account. (See page(s) 92) |
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| Note receivable | An unconditional written promise to pay a definite sum of money on demand or on a defined future date(s); also called a promissory note. (See page(s) 87) |
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| Notes payable | Obligations that arise when an organization formally recognizes a promise to pay by signing a promissory note. (See page(s) 87) |
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| Post(ing) | Transfer journal entry information to ledger accounts. (See page(s) 99) |
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| Posting reference (PR) column | A column in journals where individual account numbers are entered when entries are posted to the ledger. A column in ledgers where journal page numbers are entered when entries are posted. (See page(s) 101) |
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| Prepaid Expenses | An asset account containing payments made for assets that are not to be used until later. (See page(s) 87) |
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| Promissory note | An unconditional written promise to pay a definite sum of money on demand or on a defined future date(s); also called a note receivable. (See page(s) 87) |
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| T-account | A simple characterization of an account form used as a helpful tool in showing the effects of transactions and events on specific accounts. (See page(s) 89) |
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| Transposition error | Error due to two digits being switched or transposed within a number. (See page(s) 106) |
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| Trial balance | A list of accounts and their balances at a point in time; the total debit balances should equal the total credit balances. (See page(s) 104) |
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| Unearned revenues | Liabilities created when customers pay in advance for products or services; created when cash is received before revenues are earned; satisfied by delivering the products or services in the future. (See page(s) 87) |