Accounting Vocabulary
1. Total earnings- the total pay due for a pay period before deductions
2. Payroll register- a business form used to record payroll info
3. Medicare Tax- a federal tax paid for hospital insurance
4. Social Security act- a federal tax paid for old age, survivors, and
disability insurance
5. Salary- the money paid for employee services
6. Pay period-the period covered by a salary payment
7. Witholding Allowance- a deduction from total earnings for each person
legally supported by a tax payer, including the employee
8. Payroll- the total amount earned by all employees for a pay period
9. Payroll taxes- taxes based on the payroll of a business
10. Employee earnings record- a business form used to record details
affecting payment made to an employee
11. Tax base- the maximum amount of earnings on which tax is calculated
12. Net pay- the total earnings paid to an employee after payroll taxes and
other deductions
13. Accounting records-organized summaries of a businsess’s financial
activities
14. Withdrawls- assets out of a business for the owner’s personal use
15. Accounting System- a planned process for proving financial information
that will be useful to management
16. account Number- the number assigned to an account
17. Service Business- a business that performs for free
18. Accounting- planning, recording, analyzing, and interpreting financial
information
19. revenue- an increase in owner’s equity resulting from the operation of a
business
20. equites- financial rights to the assets of a business
21. liability- an amount owed by a business
22. T acount- an accounting device used to analyze transactions
23. Owner’s Equity-the amount remaining after the value of all liabilites is
subtracted from the value of all assets
24. Assets- anything of value that is owned
25. Blank Endorsement- only endorser’s signature
26. Postdated Check- check with a future date on it
27. Correcting entry- a journal made to correct an error in the ledger
28. Ledger- a group of accounts
29. General Ledger-a ledger that contains all accounts needed to prepare
financial statements
30. Entry- information for each transaction recorded in a journal
31. Account balance- the amount in an account
32. Sales invoice- an invoice used as a source document for recording a sale
on account
33. Journalizing- recording transactions in a journal
34. Accounting Equations- and equation showing the relationship among
assets, liabilities, and owner’s equity
35. Endorsement- a signature or stamp on the back of a check transferring
ownership
36. Checking account- a bank account from which payment can be ordered
37. Electronic funds transfer- a computerized cash payments system that
uses electronic impulses to transfer funds
38. Debit card- a bank card that, when making purchases automatically
deducts the amount of the purchase from the checking account of the card
holder
39. Chart of accounts- a list of accounts used by a business
40. Restrictive endorsement- an endorsement restricting further transfer of
a check’s ownership
41. Double entry accounting- the recording of debit and credit parts of a
transaction
42. Proving Cash- determining that the amount of cash agrees with the
balance of the cash account in the accounting records
43. Credit- an amount recorded on the right side of a T account
44. Normal balance- the side of the account that is increased
45. Net income- the difference between total revenue and total expenses
when total revenue is greater
46. Receipt- a business form giving written acknowledgement for cash
received
47. Petty Cash- an amount of cash kept on hand and used for making small
payments
48. Petty cash slip- a form showing proof a petty cash payment
49. Sales on Account- a sale for which cash will be recieved on a later date
50. Debit- an amount recorded on the left side of a T account
51. Check- a business form ordering a bank to pay cash from a bank
account
52. Fiscal period- length of time for which a business summarizes and
reports financial information
53. File maintenance- the procedure for arranging accounts in a general
ledger, assigning account numbers, and keeping records current
54. Adjustments- changes recorded on a worksheet to update general ledger
accounts at the end of a fiscal period
55. Capital- the account used to summarize the owner’s equity in a business
56. Memorandum- a form on which a brief message is written describing a
transaction
57. Source Document- a business paper from which information is obtained
for a journal entry
58. Posting- transferring information from a journal entry to a ledger
account
59. Opening an Account- writing account title and number on the heading
of an account
60. Balance sheet- a financial statement that reports assets, liabilities, and
owner’s equity on a specific date
61. Bank statement- a report of deposits, withdrawls, and bank balances
sent to a deposit by a bank
62. Special endorsement- endorsement indicating new owner of a check
63. Invoice- a form describing the good or services sold, the quantity and
the price
64. General Journal- a journal with 2 amount columns in which all kinds of
entries can be recorded
65. Worksheet- a columnar accounting form used to summarize the general
ledger information needed to prepare financial statements
66. Component percentage- percentage relationship between one financial
statement item and the total that includes that item
67. Net loss- the difference between total revenue and total expenses when
total expenses is greater
68. Trial Balance- a proof of the equality of debits and credits a general
ledger
69. Journal- a form for recording transactions in chronological order
70. Income Statement- a financial statement showing the revenue and
expenses for a fiscal period
71. Closing entries- journal entries used to prepare temporary accounts for a
new fiscal period
72. Special Amount Column- a journal amount column headed with an
account title
73. Merchandising Business- business that purchases and sells goods
74. Purchase journal- a special journal used to record only purchases of
merchandise on account
75. General Amount Column- a journal amount column that is not headed
with an account title
76. Cost of Merchandise- the price a business pays for goods it purchases to
sell
77. Vendor- a business form which merchandise is purchased or supplies or
other assets are bought
78. Cash Payments Journal- a special journal used to record only cash
payment transactions
79. Purchase invoice- an invoice used as a source document for recording a
purchase on account transaction
80. Mark up- the amount added to the cost of merchandise to establish the
selling price
81. Wholesale merchandising business- a business that buys and sells
merchandise to retail merchandising businesses
82. Merchandise- goods that merchandising business purchases to sell
83. Retail merchandising- a merchandising business that sells to those who
use or consume the goods
84. Partner- each member of a partnership
85. Partnership- business which 2 or more persons combine assets
86. Post closing trial balance- a trial balance prepared after the closing
entries are posted
87. Temporary accounts- accounts used to accumulate in for until its
transferred to the owner’s capital account
88. Permanent accounts- accounts used to accumulate info from one fiscal
period to the next
89. Adjusting entries- journal recorded to update general ledger accounts at
the end of a fiscal period
90. Expense- a decrease in owner’s equity resulting from the operation of a
business
91. Account- a record summarizing all the information pertaining to a single
item in the accounting equation
92. Transaction- a business activity that changes assets, liabilities, or OE
93. Account Title- the name given to an account
94. Proprietorship- a business owned by one person
95. Dishonored check- a check bank refuses to pay