El Cuerpo Humano

Accounting - process of identifying, measuring, and reporting financial information of an entity

Accounting Equation - assets = liabilities + equity

Accounts Payable - money owed to creditors, vendors, etc.

Accounts Receivable - money owed to a business, i.e. credit sales

Accrual Accounting - a method in which income is recorded when it is earned and expenses are recorded when theyare incurred, all independent of cash flow

Accruals - a list of expenses that have been incurred and expensed, but not paid or a list of sales that have been completed, but not yet billed

Amortization – gradual reduction of amounts in an account over time, either assets or liabilities

Asset - property with a cash value that is owned by a business or individual

Audit Trail – a record ofevery transaction, when it was done, by whom and where, used by auditors when validating the financial statement

Auditors – third party accountants who review an entity’s financial statements for accuracy and provide a statement to that effect

Balance Sheet - summary of a company's financial status, including assets, liabilities, and equity

Bookkeeping - recording financial informationBudgeting – the process of assigning forecasted income and expenses to accounts, which amounts will be compared to actual income and expense for analysis of variances

Capital Stock – found in the equity portion of the balance sheet describing the number of shares sold to shareholders at a predetermined value per share, also called “common stock” or “preferred stock”

Capital Surplus – foundin the equity portion of the balance sheet accounting for the amount shareholders paid that is greater or lesser than the “capital stock” amount

Capitalized Expense – expenses that are accumulated, not expensed as incurred, to be amortized over a period of time; i.e. the development cost of a new product

Chart of Accounts - a listing of a company's accounts and their corresponding numbersCash-Basis Accounting - a method in which income and expenses are recorded when they are paid.

Cash Flow - a summary of cash received and disbursed showing the beginning and ending amounts

Closing the Books/Year End Closing – the process of reversing the income and expense for a fiscal or calendar year and netting the amount into “retained earnings”

Cost Accounting - a type of accountingthat focuses on recording, defining, and reporting costs associated with specific operating functions

Credit - an account entry with a negative value for assets, and positive value for liabilities and equity.

Debit - an account entry with a positive value for assets, and negative value for liabilities and equity.

Departmental Accounting – separating operating divisions into their own subentities on the income statement, showing individual income, expenses, and net profit by entity

Depreciation - recognizing the decrease in the value of an asset due to age and use

Dividends – amounts paid to shareholders out of current or retained earnings

Double-Entry Bookkeeping - system of accounting in which every transaction has a corresponding positive and negative entry (debits andcredits)

Equity - money owed to the owner or owners of a company, also known as "owner's equity"

Financial Accounting - accounting focused on reporting an entity's activities to an external party; ie: shareholders

Financial Statement - a record containing the balance sheet and the income statement


Fixed Asset - long-term tangible property; building, land, computers, etc.

GeneralLedger - a record of all financial transactions within an entity

Goodwill – an intangible asset reflecting the value of an entity in excess of its tangible assets

Income Statement - a summary of income and expenses

Inventory – merchandise purchased for resale at a profit

Inventory Valuation – the method to set the book value of unsold inventory: i.e. “LIFO,” last in, first out;...