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Bookkeeping
Introduction to Bookkeeping
Term | Definition |
---|---|
Account Payable | a liability account recording that money is or will be owed. |
Bookkeeping | involves maintaining financial records for a business, either your own or within the accounting department of another business. |
Service Business | business that performs a service for payment. |
Bookkeeper | a person who records and account for the exchange of money for services, as well as money for goods. |
Accounting | a logical process for keeping accurate financial records, which is necessary for successful money management. These records show the financial strengths and weaknesses of the business. |
Account | a record pertaining to a single item in the accounting equation that summarizes all the information about that item. |
Account Title | the name given to an account. |
Account Balance | an amount in an account. |
Transaction | any activity that occurs in the business that changes part of the accounting equation (assets, liabilities, or owner's equity) |
Assets | anything of value owned & used in a business. |
Liability | any money owed. |
Owner's Equity | Determined by subtracting the value of liabilities from the value of assets; the difference is what the business is worth to the owner. |
Debtor | an entity or person who owes money. |
Accounting Equation | Assets = Liabilities - Owner's Equity (left side must always equal the right side) |
Creditor | an entity or person who has lent money. |
Balance Sheet | an accounting document that gives a snapshot of an organization's financial state at a given point in time. |