Accounting

• Accounting Equation

  This means that what the business owns (assets), must always equal the amount that the business owes (liabilities), whether they owe it to the owner (owner's equity), or to outside businesses (liabilities). Assets = Owner’s equity + Liabilities
• Asset

  Items of value that a business or person owns.
• Balance Sheet Section

  A section in the General Ledger that comprises assets, liabilities and owner's equity.
• Bank


  All money received or paid will be recorded in a bank account. The bank account of the business should be compared with the bank statement of the bank to ensure that all cash received or paid out was recorded correctly.
• Bank overdraft


  The business withdraws more money from its current bank account than is available – owes money to the bank – interest is payable to the bank on the amount overdrawn.
• Budget

  A summary of probable income and expenses for a particular period; the total amount of money allocated to a particular project or department for a specific period.
• Capital

  An amount of money (or property) invested to start up a business and make more money.
• Cash float

  The money kept in the cash register or till from which customers are given change.
• Cash Payments Journal

  A book of accounts in which all payments made by the business is recorded.
• Cash Receipts Journal

  A book of accounts in which all money received by the business is recorded.
• Cash register slip

  A document that shows the amount of each sale.
• Creditor


  A business or person from whom you have bought something on credit.
• Creditors

  People or other businesses to which the business owes money.
• Current Assets

  Assets that can be converted into cash within a year. These assets are temporary in nature, e.g. trading stock, debtors, bank account, cash float and petty cash.
• Current Liabilities

  Debt that should be paid within one year, e.g. creditors and a bank overdraft
• Double entry principle

  Every debit entry must have an equal credit entry
• Business entity principle

  The owner financial information must be kept separate from the financial information of the business.