Accounting Vocabulary
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Glossary Reference
Technical terms for recording, reporting, and analyzing financial transactions.
accounting
The action or process of keeping financial accounts.
ledger
A book or collection of accounts in which business transactions are recorded.
journal
A record of daily events or thoughts; a diary.
debit
An entry recording a sum owed, typically in accounting.
credit
An arrangement to receive goods, services, or money in advance with the promise to pay later.
trial balance
A statement that lists balances of all accounts in a double-entry bookkeeping system, showing that total debits equal total credits.
balance sheet
A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.
income statement
A financial statement that summarizes revenues, expenses, profits, and losses for a specific period.
cash flow statement
A financial document that summarizes the cash inflows and outflows of a business over a specific period.
journal entry
A written record of personal thoughts, experiences, and reflections, often kept regularly in a book or digital format.
general ledger
A general ledger is a comprehensive record of all financial transactions over the life of an organization.
fiscal period
A specific duration of time used for accounting and financial reporting purposes.
accrual
The accumulation or increase of something over time, often used in financial contexts.
depreciation
A reduction in the value of an asset over time, typically due to wear and tear.
amortization
The process of gradually reducing a debt or the cost of an asset over time through scheduled payments.
reconciliation
The act of restoring friendly relations between parties or making two or more things compatible.
subledger
A subsidiary ledger that contains detailed information on a specific account, such as accounts receivable or accounts payable.
variance analysis
Variance analysis is a quantitative tool used to evaluate performance by comparing actual and budgeted figures.
financial ratios
Quantitative measures used to assess the financial health and performance of a company.
bookkeeping
The act of recording financial transactions and maintaining financial records.
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