Financial Accounting

Amounts owed to suppliers for goods or services already received, usually recorded as a current liability until paid.

Subsidiary ledger that tracks amounts owed to each supplier and supports the accounts payable control account.

Amounts owed by customers for goods or services already delivered, usually recorded as a current asset until collected.

Subsidiary ledger that tracks amounts owed by each customer and supports the accounts receivable control account.

Ratio measuring how efficiently a business collects credit sales relative to its average receivables balance.

Accounting method that recognizes revenue when earned and expenses when incurred rather than when cash changes hands.

Expense recognized before payment because the cost has already been incurred in the current period.

Revenue earned before billing or cash receipt, usually recorded as an asset until invoiced or collected.

Contra-asset balance showing the total depreciation recorded against a depreciable asset since acquisition.

Period-end journal entry used to align revenues, expenses, assets, and liabilities with the correct reporting period.

Contra-asset estimate that reduces gross receivables to the amount a business realistically expects to collect.

Systematic allocation of an intangible asset's cost over the periods expected to receive its benefit.

Uncollectible receivable amount that must be recognized as expense directly or absorbed through an existing allowance estimate.

Accounting value recorded in the books, usually referring either to an asset's net amount or to a business's net assets after liabilities.

Amount at which an asset or liability is reported on the balance sheet after the relevant accounting adjustments.

Strict liquidity ratio comparing cash and cash equivalents with current liabilities.

End-of-period entry that transfers temporary-account balances and resets revenue and expense accounts for the next period.

Direct cost assigned to the inventory items sold during a period, reported against revenue on the income statement.

Asset-related account with a credit balance that offsets a linked asset without removing the asset's original cost.

General-ledger summary account whose balance should agree with the detail total in its related subsidiary ledger.

Assets expected to be collected, sold, or consumed within one year or the normal operating cycle.

Obligations expected to be settled within one year or the normal operating cycle, depending on the reporting context.

Liability created when a business receives cash before it has earned the related revenue.

Systematic allocation of a tangible asset's cost over the periods expected to benefit from its use.

Master accounting record that holds the balance and activity of each account used to produce financial statements.

Acquisition-related intangible asset representing the excess of purchase price over identifiable net assets in a business combination.

Reduction of an asset's carrying amount when recorded value is no longer supported by recoverable or expected economic benefit.

Goods held for sale, in production, or to be consumed in producing goods for sale, recorded as an asset until recognized through sale or use.

Record of an accounting transaction showing the accounts affected and the debits and credits used to capture it.

Ability to meet short-term obligations using cash or assets that can be converted to cash without major value loss.

Obligations due beyond one year or the operating cycle, forming the longer-dated debt and obligation side of the balance sheet.

Accrual-accounting principle that records expenses in the periods that benefit from or relate to the associated revenue.

Amounts owed from payroll processing or accruals, including net pay due, withholdings, and employer payroll-related obligations.

Long-lived tangible operating assets such as land, buildings, machinery, and equipment used across multiple periods.

Advance payment recorded as an asset at first and expensed later as the related benefit is used.

Stricter liquidity ratio that compares quick assets with current liabilities without relying on inventory conversion.

Amount an entity expects to recover from an asset through use or disposal, used to judge whether impairment is required.

Accumulated profit kept in the business after losses and dividends, reported within equity rather than as a cash balance.

Detailed ledger supporting a general-ledger control account such as receivables, payables, or inventory.

Partial reduction of an asset's carrying amount when the recorded amount is no longer fully supportable.

Removal of a recorded amount from the books when a receivable, asset, or identified balance is no longer expected to provide value.