GAAP: is a standard of methods that accountants and others use to prepare their financials.
Basic accounting formula: The formula or equation takes what a owner might owe to creditors and others adds it to what the owner might already own and factors in what the business owns. The equation can be done in different ways, but no matter there is always a balanced outcome.
Transaction, t-account: A t-Account provides a visual aid to show an account in a business’ financial books. It provides a method of organization.
General ledger: All transactions are documented in the general ledger. It is the foundation to track all transactions.
Debit: Either a decrease in liabilities or an increase in assets that is to pay off an outstanding debt.
Credit: Is an agreement between two parties where one provides the ability for the other to purchase something of value as long as it is paid off over time.
Account balance: This is the balance that is reflected on an account at the beginning of a business day, it is different than the available balance. It does not provide pending or new activity.
Trial balance: Is a tool that is used to list any and all credit and debit balances. It provides one with knowing if there are any errors in the ledger.
Journal: Is a “book” that contains all the documented financials and all the accounts it affects....
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