Accounting defintions
book keeping
is the detailed recording of all financial transactions in a business
accounting
uses book keeping records to oreosre financial statements and help with decscion making
a stetemnt of financial position
shows he assets nd liabilities of a business on a certain date
capital
total resources provided by th owner and representes what the owner owes the business
asssets
represents anything owed by or owing to the business
liabilities
represnts anything owed by the business
whats the accounting equation
assets = captal + liabilities
what is double entry book keeping
the process of making a debit entry and a credit entry for each transaction
drawinga
any value taken from the business by the owner of that business
trial balance
a list of balances on the accounts in th ledger at a crtain date
error of commmission
when the correct amount is entered on th correct side but in the wrong account of the same class
error of original entry
when te wrong amount is used when a transaction is first entered in te accounting records
error of principle
when correct ammount is entered i the correct side but the wrong class of accounts
error of ommission
when a transaction is completely ommitted and not recorded
errror of complete reversal
when the correct amount is entered in the correct accoun but entry has been made on the wrong side
compensating error
when two or more errors cancel each other out
petty cash book
used torecord low value cash payments
imprest system
its where the amountspent on petty csh is restores so that the petty cashier starts esch period with the sme amount
invoice
a document issued by the supplier of groods on cedit showing details, quantaties and pirces of goods supplied
debit note
a doccument issued by a purchaser of goods on credit to requet a reduction in the incoice made
credit notes
a document isssed by the supplier of god on credit to notify a redction in an invoice previously issues
statement of account
a document issued by the seller of goood to sumarize th transactions for the month
cheque
a wriiten order to a bank to pay a sttedsum of money to the prson or business named on the order
receipt
a written acknowledgement of money received and acts a proof of paymet
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