Korea Computerized Accounting Level 2 key terms

A recording method in which every transaction is entered with equal debit and credit amounts in two or more accounts, so total debits always equal total credits and the books stay balanced.

The left side (debit) and right side (credit) of a T-account. Debits increase assets and expenses; credits increase liabilities, equity, and revenue, and each entry must balance.

The step of analyzing a transaction and writing the entry as debit accounts and credit accounts with amounts, usually with a short description and date, before posting to ledgers.

Transferring amounts from journal entries to the individual accounts in the general ledger, so each account accumulates its balance for later trial balance and reporting.

The master collection of all accounts, each showing its debits, credits, and running balance. It is the source for the trial balance and financial statements.

A detailed ledger for one control account, such as individual customers or suppliers, whose balances must add up to the balance of the related general ledger control account.

A list of all account balances at a date, with debit and credit columns that must be equal. It detects arithmetic and posting errors but not all errors, such as omitted entries.

Recognizing revenue when earned and expenses when incurred, regardless of cash timing. It requires adjusting entries for accruals, deferrals, and depreciation at period end.

Recording revenue in the period the goods or services are transferred to the customer, measured at the expected consideration, rather than when cash is received.

Amounts owed by customers for goods sold or services performed on credit, recorded as an asset and later reduced by collections, discounts, returns, and bad-debt write-offs.

A contra-asset account estimating receivables that may not be collected. It is credited at period end and deducted from gross receivables to show net realizable value.

Goods held for sale or use in production, valued at acquisition cost. Cost flow methods such as specific identification, FIFO, or weighted average affect cost of goods sold and ending inventory.

The cost of inventory sold during a period, computed as beginning inventory plus purchases minus ending inventory under a periodic system, and matched against sales revenue.

Systematic allocation of a tangible asset's depreciable cost over its useful life. Common methods are straight-line, declining balance, and units of production.

Long-lived tangible assets used in operations, such as buildings, machinery, and vehicles, recorded at cost including acquisition charges and depreciated over their useful lives.

Present obligations arising from past events whose settlement is expected to transfer economic resources. They include trade payables, borrowings, and accrued expenses.

Amounts owed to suppliers for goods or services purchased on credit, recorded as a current liability and reduced when payment is made or purchase returns occur.

The residual interest in assets after deducting liabilities. It increases with owner contributions and profits and decreases with withdrawals and losses.

Cumulative profits kept in the business rather than distributed. It grows with net income and decreases with dividends or losses and may include voluntary or legal reserves.

End-of-period procedures that adjust account balances, close revenue and expense accounts to retained earnings, and prepare the trial balance and financial statements.

The monetary amount of resources consumed to acquire goods or produce services. In cost accounting it is classified into materials, labor, and overhead for product costing.

Indirect production costs that cannot be traced directly to a product, such as factory rent, utilities, and supervision. They are allocated to products using a predetermined basis.

Assigning indirect costs to cost objects such as products, departments, or jobs using a systematic basis, so total costs can be attributed fairly for pricing and performance evaluation.

A factor that causes or influences a cost, such as machine hours, labor hours, or number of setups. It provides the allocation base for assigning overhead to cost objects.

Estimated total overhead divided by the estimated activity base for the period, used to apply overhead to production before actual overhead is known.

A costing method for continuous mass production, where costs are accumulated by process or department and averaged over equivalent units of output.

A costing method that accumulates costs for each distinct job or order, commonly used where products differ, such as custom manufacturing or construction.

An indirect tax levied on the value added at each stage of supply of goods and services. Businesses collect output tax, claim input tax, and remit the net amount.

VAT paid on purchases and expenses that a registered business may deduct from output tax, provided it relates to taxable supplies and proper tax invoices are held.

A document issued by a registered supplier showing the supply amount and VAT, used by the buyer to claim input tax and by tax authorities to cross-check reported transactions.

Zero-rating applies a 0 percent rate to exports and certain supplies while allowing input tax refunds; exemption imposes no VAT but generally denies input tax deduction.

A tax on individuals' income, including business, wage, and other income, computed by applying progressive rates to taxable income after deductions and credits.

A tax on a company's taxable income for a business year, calculated by adjusting accounting profit for tax purposes and applying the applicable corporate tax rates.

A payer deducts tax at source from certain payments such as wages or service fees and remits it to the tax office on behalf of the recipient by the due date.

Adjusting accounting profit to taxable income by adding back non-deductible expenses and deducting non-taxable income, including timing differences and carryforwards.

Entering company details, fiscal year, account codes, departments, customers, suppliers, and opening balances into the accounting software before daily transaction entry begins.

A unique identifier assigned to each account in the computerized system, often structured by category, so transactions post to the correct ledger and statements aggregate correctly.

The balance of an account carried forward from the prior period and entered at system setup. Opening debit and credit totals must balance before processing new transactions.

The input document in computerized accounting that records a transaction's date, accounts, amounts, and description. Approved vouchers are posted to update ledgers automatically.

Keying daily transactions into the system as vouchers, selecting debit and credit accounts and amounts, so the software validates balance and posts to the ledger.

A report at a specific date showing assets, liabilities, and equity, where total assets equal total liabilities plus equity, generated from the ledger balances.

A report for a period showing revenue, expenses, and the resulting profit or loss, produced from revenue and expense account balances after closing entries.