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    Accounting Terms Cheat Sheet PDF

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    Banzragch Jamsran
    This document defines over 20 key accounting concepts in plain language. It explains that accounting tracks and analyzes business transactions to measure a company's health and report financial results. It then defines important terms like the accounting cycle, balance sheet, income statement, statement of cash flows, accrual vs cash accounting methods, chart of accounts, debit and credit entries, general ledger, and more.

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    Accounting Terms Cheat Sheet PDF

    Uploaded by

    Banzragch Jamsran
    438 views5 pages
    This document defines over 20 key accounting concepts in plain language. It explains that accounting tracks and analyzes business transactions to measure a company's health and report financial results. It then defines important terms like the accounting cycle, balance sheet, income statement, statement of cash flows, accrual vs cash accounting methods, chart of accounts, debit and credit entries, general ledger, and more.

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    This document defines over 20 key accounting concepts in plain language. It explains that accounting tracks and analyzes business transactions to measure a company's health and report financial results. It then defines important terms like the accounting cycle, balance sheet, income statement, statement of cash flows, accrual vs cash accounting methods, chart of accounts, debit and credit entries, general ledger, and more.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    438 views5 pages

    Accounting Terms Cheat Sheet PDF

    Uploaded by

    Banzragch Jamsran
    This document defines over 20 key accounting concepts in plain language. It explains that accounting tracks and analyzes business transactions to measure a company's health and report financial results. It then defines important terms like the accounting cycle, balance sheet, income statement, statement of cash flows, accrual vs cash accounting methods, chart of accounts, debit and credit entries, general ledger, and more.

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    © All Rights Reserved
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    Accounting terms cheat

    sheet: +20 concepts defined


    in plain language

    Accounting

    A system used to record more than just financial transactions. Done right, accounting
    (1) tracks and analyzes business transactions in total, (2) measures and improves the
    health of a business, as well as (3) reports financial results to investors, creditors, and
    regulators.

    Your accounting system produces financial statements; such as …

    • Balance sheet: Financial position as of a specific date

    • Income statement: Profit or loss for a stated time period

    • Statement of cash flows: Inflows and outflows for a month or year

    Accounting cycle

    The cycle includes gathering information from source documents and deciding on
    the financial impact of a transaction. Next, you record the transaction using a journal
    entry, and the information is posted to general ledger. 

    Once all the transactions are posted, you generate a trial balance and use the data to
    produce financial statements.
    Accrual method of accounting

    A method that requires a business to post revenue when it is earned, and expenses
    when they are incurred. This method applies the matching principle, which matches
    revenue with the expenses that relate to producing the revenue. 

    Balance sheet

    A snapshot of a company’s financial position at a specific date. It reflects the


    company’s assets, liabilities, and equity balances. 
    Cash method of accounting

    A method that posts revenue when cash is received, and expenses when cash is paid.
    The cash method does not match revenue with expenses.

    Chart of accounts

    A list of each account needed to manage the business, and a corresponding account
    number.

    Credit entries

    Credit entries are posted on the right side of each journal entry. Liability and revenue
    accounts are increased with a credit entry, with some exceptions.

    Current assets

    Cash, and assets that will be converted into cash within 12 months. 

    Current liabilities

    Amounts due to be paid within a year, such as accounts payable (amounts you owe
    suppliers), payroll liabilities, and amounts due on short-term business loans, such as a
    line of credit.

    Debit entries

    Debit entries are posted on the left side of each journal entry. Asset and expense
    accounts are increased with a debit entry, with some exceptions.
    Double-entry bookkeeping

    A system that uses the balance sheet equation (assets = liabilities + equity) and the
    concept of debits and credits to post accounting transactions.

    Financial statements

    A set of reports, including the balance sheet, income statement, and the statement of
    cash flows.

    General ledger

    A record of every transaction posted to the accounting records since business


    inception.

    Income statement

    Reports revenue, expenses, and net income (profit) or loss for a specified period. The
    statement is based on the income statement formula:

    Revenue less expenses equals net income (or loss).

    Journal

    A record of each transaction that occurs, listed in chronological order, and


    accountants post activity using a journal entry. 

    Long-term liabilities

    Amounts that are due to be paid in a year or more, including long-term loans,
    mortgage payments, and future employee benefits. These liabilities are non-current,
    but the category is often defined as “long-term” in the balance sheet.
    Net income

    Total revenue less expenses, for a month or year. Net income is calculated in the
    income statement, and the balance increases equity.

    Non-current assets

    Assets that will not be converted into cash within 12 months. 

    Retained earnings

    This balance is defined as total company earnings (net income) since inception, less
    all dividends paid to owners since inception. 

    Statement of cash flows

    Reports cash inflows and outflows for operating, financing, and investing activities.

    Trial balance

    A listing of each account used to post transactions, and the current account balance.

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