Korea Computerized Tax Accounting Level 1 key terms

A recording method in which every transaction is entered with equal total debits and credits, so the accounting equation stays balanced and errors are easier to detect.

The relationship stating that assets equal liabilities plus equity. Every transaction changes at least two elements while preserving this equality.

Recording revenue when earned and expenses when incurred, regardless of when cash moves. Required for reliable period-by-period comparison of performance.

The rule that expenses are recognized in the same period as the revenues they helped generate, so reported profit reflects cause and effect rather than payment timing.

The structured list of account codes and names used to classify transactions, typically segmented into assets, liabilities, equity, revenue, and expense ranges.

A numeric or alphanumeric identifier assigned to each ledger account. Consistent coding rules let the system sort, subtotal, and map balances to statements automatically.

The initial posting of asset, liability, and equity balances when a system goes live or a fiscal year begins, forming the starting point for subsequent transactions.

The twelve-month period a business uses for reporting and closing. In Korea it commonly follows the calendar year but may differ if properly defined in the system.

Standing reference records such as customers, vendors, employees, items, and departments that transactions point to, so accuracy here prevents repeated downstream errors.

The record holding a supplier's registration number, business name, address, bank details, and tax type, used to validate input tax credit and payment processing.

A segment attached to transactions identifying the responsible cost center or team, enabling budget comparison and management reporting by organizational unit.

A document recording a manual or system-generated journal entry, listing debit and credit lines, accounts, amounts, and a description of the underlying event.

The process of transferring approved voucher amounts into the general ledger, updating account balances and making the entry part of official records.

The central repository of all posted account activity, from which balances feed the trial balance, subsidiary schedules, and financial statements.

A detailed ledger for one area, such as receivables or payables, tracking individual balances by customer or vendor while reconciling to a control account in the general ledger.

A general ledger account whose balance must equal the sum of the underlying subledger detail, serving as a built-in check on posting completeness.

A counter-entry that cancels a previously posted voucher, keeping the audit trail intact rather than deleting or overwriting the original record.

The chronological record of who entered, modified, or approved each transaction and when, allowing later verification of how a balance arose.

Splitting incompatible tasks such as entry, approval, and payment release among different people so no single user can complete a transaction unsupervised.

Rules assigning users only the permissions their role requires, protecting sensitive functions like master data changes, journal approval, and period closing.

A consumption tax collected at each stage of supply, where businesses remit output tax less input tax credit for the period to the tax authority.

VAT charged on a supplier's sales and shown on the tax invoice issued to the buyer, which the seller reports and remits after deducting credits.

VAT paid on business purchases that may be deducted from output tax, provided the purchase is supported by valid documentation and relates to taxable supplies.

The document a supplier issues for a taxable sale, stating both parties' registration numbers, supply date, value, and VAT amount, and transmitted electronically in Korea.

The document received from a supplier evidencing VAT paid, which is the core support for claiming input tax credit in the period.

A tax invoice issued and transmitted in digital form through the national system, generating a unique identifier and reducing manual data entry errors.

A taxable supply charged at a zero percent rate, such as certain exports, which produces no output tax while still permitting input tax credit.

A supply outside the VAT scope, such as specified education or medical services, on which no output tax is charged and related input tax is generally not creditable.

Tax deducted at source by the payer on certain payments such as wages, rent, or fees, then remitted to the authority on behalf of the recipient.

Tax levied on a company's taxable income for the year, computed from accounting profit after adjustments required by tax law.

An addition or deduction made to accounting profit to arrive at taxable income, covering items such as non-deductible expenses or tax-exempt income.

A balance recognizing the future tax effect of temporary differences between accounting carrying amounts and tax bases, reported as an asset or liability.

A listing of all account balances at a date, used to confirm total debits equal total credits before statements are prepared.

An end-of-period entry recording accruals, deferrals, depreciation, or provisions so that reported balances reflect the accrual basis before closing.

Systematic allocation of a tangible asset's cost over its useful life, recorded as periodic expense and accumulated against the asset's carrying amount.

The net book value of an asset or liability, equal to its recorded cost less accumulated depreciation, amortization, or impairment.

A reduction in an asset's carrying amount when its recoverable value falls below book value, recognized as a loss in the period identified.

An end-of-period entry transferring revenue and expense balances to retained earnings so temporary accounts start the new year at zero.

Cumulative profit kept in the business after dividends, increased by each period's net income and reduced by distributions or prior-period corrections.

The controlled process of finalizing adjustments, locking the period against further posting, and producing statements, usually requiring authorized approval.

The setup linking each ledger account to a line on the balance sheet, income statement, or cash flow statement so reports generate automatically and consistently.

Comparing two independent records, such as a bank statement and cash ledger, and explaining differences until the balances agree.

A payment made before the benefit is consumed, recorded as an asset and then expensed over the periods it covers.

A cost incurred but not yet paid or invoiced at period end, recorded as a liability and expense so the period bears its proper share.

The owners' residual interest in assets after deducting liabilities, consisting of contributed capital and accumulated retained earnings.

An organizational unit to which costs are assigned for planning and control, letting managers compare actual spending against budget.