MINI DICTIONARY FOR
ACCOUNTING AND
BOOKKEEPING
Made by: de leon, aerielle samantha l.
Grade and section: 10A
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ACCOUNTING - The process of recording financial transactions pertaining to a business.
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ACCRUAL ACCOUNTING - A financial accounting method that allows a company to record revenue
before receiving payment for goods or services sold and record expenses as they are incurred.
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ALLOCATION - The process of shifting overhead costs to cost objects, using a rational basis of allotment.
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ASSETS - Items of value owned by a business.
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CAPITAL - The financial resources that businesses can use to fund their operations like cash, machinery,
equipment and other resources.
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CASH BOOK - The main book in which is recorded all the funds moving in and out of the business
through the bank account.
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CASH FLOW - The movement of cash through the business; this report details how cash flowed into the
business and what it was spent on.
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CREDITORS - The person or business to whom our business owes money for purchases made.
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DEBIT - An entry recorded for a payment made or owed.
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DEDUCTIBLE - An expense that an individual taxpayer or a business can subtract from adjusted gross
income while completing a tax form.
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DEPRECIATION - The estimated reduction in value of a fixed assets within a fiscal year.
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DOCKET - A document that contains information about a product sold from one business to another.
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DRAWINGS - Funds withdrawn from a business by the business owner for their personal use.
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EQUITY - The amount of capital invested or owned by the owner of a company. The equity is evaluated
by the difference between liabilities and assets recorded on the balance sheet of a company.
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INSOLVENCY - The state that a company or individual enters when they're not able to pay their debts.
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INTEREST - The monetary charge for the privilege of borrowing money.
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INTERIM REPORTS - A complete or condensed set of financial statements for a period shorter than a
financial year.
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INVOICE - A document that details the sale or purchase of stock, parts, or services.
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LEDGER - A book or digital record containing bookkeeping entries.
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LIQUIDITY - A measure of a company's ability to pay off its short-term liabilities — those that will come
due in less than a year.
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MARKETABLE SECURITIES - Investments that can easily be bought, sold, or traded on public
exchanges
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MARKUP - What you add to prices in order to make money.
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NIL BALANCE - A balance that is zero or 0.00.
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OVERHEAD - Expenses associated with running a business that can't be linked to creating or producing
a product or service.
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RECONCILIATION - The process of comparing transactions and activity to supporting documentation.
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REIMBURSE - Payments for business related expenses that have been purchased using personal funds.
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SINGLE – ENTRY BOOKKEEPING - A bookkeeping system in which all financial transactions only
have to be entered once.
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SOLVENCY - A company's ability to cover its financial obligations.
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TURNOVER - Calculates how quickly a business collects cash from accounts receivable or how fast the
company sells its inventory.
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VARIABLE COST - A corporate expense that changes in proportion to how much a company produces
or sells.