Course Glossary

Course Glossary

 

accounting cycle: the steps of accounting activities that are followed during each fiscal period

 

audit test: a sampling of numbers in accounting records to check for accuracy

 

cash short and over account: an account used to record small discrepancies in cash

 

establishing the petty-cash fund: withdrawing cash and placing it into a petty-cash box or drawer

 

This must also be entered into the journal.

 

fiscal period: the period of time over which earnings are measured

 

journalizing: the process of dating data from source documents, and entering the data in chronological order in a journal

 

petty cash: a small amount of cash kept on hand to pay for minor expenditures

 

petty-cash voucher: a form showing the amount paid and other details

 

A voucher is placed in the petty-cash box each time cash is taken out of the box.

 

posting: transferring the accounting entries from the journal into the ledger

 

replenishing the petty-cash fund: removing the vouchers from the petty-cash box, and bringing the amount of cash in the box back up to the established amount

 

service business: a business that sells a service to the public, such as a hairstyling salon or a tutoring service

 

slide error: an error in accounting when the decimal point is incorrectly placed to the left or right

 

T-account: a skeleton form of ledger account, showing the account title and the debit and credit sides

 

transaction: a financial event that changes at least two accounts in a business

 

transposition error: an error in accounting when numbers are reversed

 

trial balance: a list of all the debits and credits in the ledger

 

Its purpose is to prove that total debits equal total credits.

 

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