Cameroon GCE O-Level Accounting key terms

The process of identifying, recording, classifying, summarising and communicating financial information about an entity so that users can make informed economic decisions about it.

Financial data that has been processed into reports such as the trading account, profit and loss account and balance sheet, used by owners, managers, creditors, government and other stakeholders.

The routine, mechanical recording of business transactions in the books of account; it supplies the raw data that accounting later analyses and interprets.

The assumption that a business will continue operating for the foreseeable future, so assets are valued on a basis other than break-up value and costs are carried forward.

The rule that revenue is recorded when earned and expenses when incurred, not when cash is received or paid, so each period shows the income it actually generated.

The principle that expenses are set against the revenue of the same period, so the profit reported relates income earned to the costs incurred in earning it.

The practice of exercising caution when estimating, recognising liabilities and losses as soon as they are probable but recognising gains only when realised.

The requirement that an entity applies the same accounting policies and methods from one period to the next, so figures remain comparable over time.

The principle that the business is treated as separate from its owner, so private transactions of the owner are excluded from the business books.

The relationship assets equal capital plus liabilities, which must hold after every transaction and which underlies the double-entry system.

The original written evidence of a transaction, such as an invoice, receipt, credit note, debit note or cheque counterfoil, from which a book of original entry is written up.

The book of original entry in which transactions that do not fit the other day books, such as corrections, opening entries and asset purchases, are recorded with narration.

A book of original entry listing credit sales in date order, with the seller's invoice number, customer name and amount, totalled periodically and posted to the ledger.

A book of original entry listing credit purchases of goods in date order, showing supplier, invoice number and amount, totalled and posted to the ledger.

A document issued by a seller to reduce the amount owed by a customer, usually for goods returned or an overcharge; the seller records it in the returns inwards book.

A book kept by a petty cashier for small payments, often analysed into expense columns, and replenished under the imprest system when cash runs low.

A control for petty cash in which a fixed float is issued and the amount spent is reimbursed periodically, restoring the float to its original level.

The system in which every transaction is recorded with equal debits and credits in at least two accounts, keeping the books in balance.

The main book of account, containing the nominal, sales and purchases ledger accounts, to which entries from the books of original entry are posted.

A list of ledger account balances at a given date, debit balances in one column and credit balances in another, used to check arithmetical accuracy.

A temporary account opened to hold the difference when a trial balance does not agree, cleared once the errors causing the imbalance are found and corrected.

A bookkeeping mistake in which a transaction is entered in the wrong class of account, for example capital expenditure recorded as revenue expenditure; it does not disturb the trial balance.

A schedule that starts from the bank statement balance or cash book balance and adjusts for unpresented cheques, uncredited deposits, bank charges and errors to reconcile the two.

A book that records cash and bank receipts and payments, acting both as a book of original entry and as the cash and bank ledger accounts.

The systematic allocation of the cost of a non-current asset, less any residual value, over the periods expected to benefit from its use.

A depreciation method charging an equal amount each year, calculated as cost less residual value divided by the expected useful life.

A depreciation method applying a fixed percentage to the asset's net book value each year, giving higher charges early in the asset's life.

The cost of a non-current asset less the total depreciation charged on it to date; the amount at which it appears in the balance sheet.

An estimate of the amount of trade receivables unlikely to be collected, charged as an expense and deducted from receivables in the balance sheet.

An amount owed by a customer that is written off as irrecoverable because the debtor is unable or unwilling to pay.

An expense paid in one period that relates to a later period; it is carried forward as a current asset until the benefit is consumed.

A cost incurred in the current period but not yet paid; it is charged to the profit and loss account and shown as a current liability.

A summary account in the general ledger recording total credit sales, receipts, returns and bad debts, whose balance should equal the total of individual customer balances.

A summary of assets and liabilities prepared to estimate capital when records are incomplete, usually by comparing opening and closing capital with drawings and cash introduced.

The section of a partnership's profit and loss account showing how profit is shared: interest on capital, partners' salaries, interest on drawings and the residual division.

In a partnership, the account recording each partner's drawings, share of profit, interest on capital and salary, as distinct from the fixed capital account.

An account that calculates the cost of goods produced by adding direct materials, direct labour and production overheads to work in progress and adjusting for closing work in progress.

The total of direct materials, direct labour and direct expenses incurred in production, before any factory overhead is added.

Current assets divided by current liabilities; a liquidity measure showing whether short-term assets cover short-term obligations.

Gross profit expressed as a percentage of net sales, showing the proportion of each sale remaining after the cost of goods sold.

The policies and procedures, such as segregation of duties, authorisation limits and bank reconciliation, designed to safeguard assets and ensure reliable records.