Accounting
term that refers to the overall process of tracking your business's income and expenses, and then using these numbers in various calculations and formulas to answer specific questions about the financial and tax status of the business.

Ledger
A physical collection of related financial information, such as revenues, expenditures, accounts receivable, and accounts payable.

Cash Letter
A group of checks accompanied by a paper listing sent to a clearinghouse, a Federal Reserve Bank, or another institution. A cash letter contains a number of negotiable items, mostly checks, accompanied by a letter that lists the amounts and instructions for transmittal to another bank. May also be called a transmittal letter.

Audit
A systematic review or examination of the assertions or actions of a third party to evaluate conformance to some norm or benchmark.

Double-Entry Accounting
A system of accounting that records each business transaction twice.

Bad Debt
Money owed for a business debt that cannot be collected

Bookkeeping
The task of recording the amount, date, and source of all business revenues and expenses. Bookkeeping is essentially the starting point of the accounting process. Only with accurate bookkeeping numbers can meaningful accounting be

Receipt
A written record of a transaction.

Accrual Method Of Accounting
Accounts for income and expenses in the 12-month period earned or incurred, which is not necessarily when it is received or paid.

Accounts Payable
Amounts that a business owes