Accounting Unit 3: Vocabulary

To pass this unit, please study the 14 vocabulary words below.
asset
a resource in the possession of a company which is available for use
The auditors checked the factory to make sure that all the assets listed in the accounts were there.
authorise
to give permission to happen
All purchases over five thousand dollars must be authorised by accounts payable.
daybooks
a journal of financial transactions entered on the day that they happened
I hate working with daybooks, it is so much easier to use a computerised accounting system.
double entry bookkeeping
a system of keeping financial records where each transaction has a debit and a credit posted
The majority of experienced bookkeepers use double entry bookkeeping as it allows them to check that both sides agree.
ensure
to make certain that something happens
All business owners should ensure that their tax returns are received by the Inland Revenue by 31st April.
expenditure
all monies spent
The director stopped the lunch programme for employees so he could reduce expenditure and save money.
income
all monies received
The company is looking for a way to increase its income, so they are talking about expanding into a new market.
incorrect
wrong, false
John wasn't paying attention so the answer he got was incorrect.
liability
a company's debt or obligation
The company shut down when the accounts showed that the liabilities were larger than the income and assets.
nominal code
a reference number which allows the grouping of financial transactions
It took me ages to remember all of the nominal codes, but now I do it is much quicker to enter invoices into the system.
post
to make an entry in an accounting ledger or software system
When you post a transaction in the system, the programme will automatically post the second side of it.
return
a form which is submitted to a tax authority
When James had finished the clients' tax return he gave it to his supervisor to check before sending to the Inland Revenue.
single entry bookkeeping
a simple system of keeping financial records, where transactions are entered only once
As Bob wasn't very good at maths he used single entry bookkeeping to keep track of his daily transactions.
T-accounts
an informal word for a set of financial records using double entry bookkeeping, with debits entered on the left and credits on the right
You should remember that each T-account should balance. If it doesn't, there must be a mistake somewhere.
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