Bookkeeping NC III key terms

A recording method where every transaction is entered in at least two accounts, with total debits always equalling total credits, so the accounting equation stays balanced.

An entry on the left side of an account. It increases assets and expenses and decreases liabilities, equity and income.

An entry on the right side of an account. It increases liabilities, equity and income and decreases assets and expenses.

A numbered list of all account names a business uses, grouped by type (assets, liabilities, equity, income, expenses), so transactions are coded consistently.

The master record holding every account of the business with its individual debits and credits and running balance.

A supporting ledger that holds the detail behind one control account in the general ledger, such as individual customer or supplier balances.

A dated record of a transaction showing the accounts to be debited and credited, the amounts, and a short explanation.

The book of original entry used for transactions that do not fit the special journals, such as adjustments, corrections and opening entries.

The original paper or electronic evidence of a transaction, such as a sales invoice, receipt, delivery note or bank statement, used to support the entry.

Amounts owed to the business by customers for goods or services already supplied on credit.

Amounts the business owes to suppliers for goods or services received on credit and not yet paid.

An accounting approach that records income when earned and expenses when incurred, regardless of when cash actually moves.

An accounting approach that records income only when cash is received and expenses only when cash is paid.

An end-of-period journal entry that updates accounts for items such as accruals, prepayments, depreciation and inventory before reports are prepared.

A cost already incurred but not yet invoiced or paid at period end, such as unpaid wages or electricity used but not billed.

A payment made in advance for goods or services not yet received, treated as an asset until the benefit is used up.

The systematic allocation of the cost of a long-lived asset over the periods that benefit from its use.

The total depreciation charged against an asset since it was acquired, shown as a contra-asset that reduces its carrying amount.

The value of an asset shown in the books, being its original cost less accumulated depreciation or impairment.

A list of all ledger account balances at a given date, used to check that total debits equal total credits before reports are prepared.

A report showing income earned and expenses incurred over a period, arriving at profit or loss.

A report at a single date listing assets, liabilities and equity, showing that assets equal liabilities plus equity.

The owner's residual interest in the business after liabilities are deducted from assets, increased by profit and contributions and reduced by drawings.

Money or goods taken from the business by the owner for personal use, which reduces equity rather than being an expense.

Sales revenue less the cost of the goods sold, before deducting operating expenses.

The cost of inventory actually sold during a period, calculated from opening stock plus purchases less closing stock.

Goods held for sale or for use in production, valued at cost or net realisable value, whichever is lower.

The process of matching the cash book balance to the bank statement and explaining differences such as unpresented cheques and deposits in transit.

A book combining the cash account and bank account, recording all receipts and payments and giving a running cash and bank balance.

A periodic record issued by the bank listing deposits, withdrawals, charges and the closing balance on the account.

A cheque written and recorded in the cash book but not yet presented to and cleared by the bank, so it does not appear on the statement.

A small cash float kept for minor day-to-day payments, controlled through a voucher system and periodic reimbursement.

A signed slip supporting each small cash payment, showing date, amount, purpose and the person who received the money.

The total earnings of an employee for a pay period before any deductions are taken out.

The amount actually paid to an employee after all statutory and other deductions are subtracted from gross pay.

A summary sheet for a pay period listing each employee's gross pay, deductions, net pay and employer contributions.

Income tax deducted by the employer from an employee's pay and remitted to the tax authority on the employee's behalf.

A required form or filing submitted to a government agency within a set deadline, reporting figures such as taxes, contributions or payroll data.

A tax charged on sales of goods or services, collected from customers and remitted to the tax authority after deducting tax paid on purchases.

Value-added tax paid on business purchases, which may normally be offset against the output tax collected on sales.

Value-added tax charged on the business's own sales and collected from customers, payable to the tax authority after offsetting input tax.

The recorded path of a transaction from source document through journal to ledger and report, allowing each figure to be traced and verified.

A stored copy of accounting data kept separately from the working file so records can be restored after loss, damage or system failure.

Rules that limit who may view or change accounting records, typically through unique user logins, passwords and assigned permission levels.

The process of spotting conditions or practices in the workplace that could cause harm, so they can be removed or controlled.

Gear such as gloves, masks or eyewear worn to reduce a worker's exposure to a workplace hazard.