Accounting Terms

This article contains a glossary of accounting terms,  as well as terms related to MultiLedger and your computer.

Accrual Accounting – a method of accounting in which transactions are recorded in the period that they occur, which is not necessarily when cash changes hands.

ASCII – an abbreviation for the American Standard Code for Information Interchange. It is a standard way of representing text in computer files.

Assets – property owned by the company, such as cash, inventory, furniture, equipment, and buildings.

Audit Trail – records of the transactions of a company.

Balance Sheet – a report which lists the assets, liabilities, and equity in a company as of a certain date.

Bank Reconciliation – a screen in MultiLedger used to reconcile the cash accounts with the bank statements.

Beginning Balances – those account balances that are carried forward from a previous accounting period.

Cash Accounting – a method of accounting in which revenues are recorded when cash is received and expenses are recorded when cash is paid.

Cash Flow Statement– a report which shows the cash in and out for a given period of time.

Chart of Accounts – the account numbers and descriptions which a company uses to record all transactions.

Check Box – a small square box that appears in a dialog box used to choose an option.

Click– positioning the pointer on the object to be selected, and then pressing and releasing the mouse button.

Close Box– a small square box in the upper left hand corner of the title bar of the current window or dialog box on Macintosh or the ‘X’ box in the upper right hand corner of the current window on Windows.

Close Year – an accounting procedure in which the balances in the income and expense accounts are transferred to the balance sheet (to Equity).

Control Buttons – buttons which are used to cause an action to take place. The action is indicated by the button title.

Customer Invoices – a screen in MultiLedger used to record sales of items and generate invoices.

Customer Payments – a screen used to record payments on account from customers.

Dialog Box – a box where choices are made or data is entered.

Disbursements Journal – a journal used to record checks for items not entered in accounts payable.

Double-click – positioning the pointer on the object to be selected, and then clicking twice in quick succession with the mouse button.

Double Entry Accounting – a method of accounting in which each transaction has equal debit and credit amounts. In this way, the accounts remain balanced.

Drag – the act of positioning the pointer over the item to be dragged, and then holding the mouse button down while moving the mouse.

Equity (Owner’s Equity) – the rights to the properties of a business, such as common stock and retained earnings.

Expenses – expenditure for operating costs of an accounting period.

Export – the capability to move data into a text file which can be used by other applications.

Financial Snapshot– a report which shows a summary of cash, receivables, payables, inventory and several financial ratios.

Fiscal Year – the twelve-month accounting period used by a company.

Format – the ability to define the placement of fields for checks.

General Journal – a journal used to record transactions that do not fit within the scope of the Receipts or Disbursements Journal, such as depreciation or amortization adjustments.

General Ledger – a collection of ledger accounts which track a company’s financial activities.

Icon- a picture on the desktop that represents a file.

Income – revenues received by a company, usually from sales.

Income Statement – a report which shows the income and expenses of a company for a given time period.

Item Purchases – a screen in MultiLedger used to record purchases of items.

Interface Accounts – a screen used to assign ledger accounts to posting categories.

Liabilities– any debts owed by a company, such as accounts payable or sales taxes payable.

Payables Journal – a journal used to record payables.

Pointer – the small shape on the screen that follows the movement of the mouse (usually an arrow).

Profit Center – a portion of a company that is responsible for its own income and expenses.

Radio Button – a hollow button which, when clicked on, becomes filled in with a black circle. Radio buttons are a means of making a single choice from several related alternatives within a dialog.

Receipts Journal – a journal used to record deposits to cash accounts for items not entered in accounts receivable.

Retained Earnings – that portion of Owner’s Equity which represents the retained net income/loss of a company.

Reversing Entry – an entry that reverses a previous entry.

Sales Journal – a journal used to record sales and generate invoices.

Scroll – to move lines of text within a box so that a different portion of the text may be viewed.

Select – to use the mouse to click and drag across some information in order to highlight it.

Text File – a file which can be opened by word processing and other software packages.

Trial Balance – a listing of all of the accounts from the chart of accounts along with their balances.

Vendor Payments – a screen used to record payments to vendors and to generate checks.

Year-to-date – the total balance of an account from the first period in the fiscal year to the current period.