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Category: Accounting Terms

Become an accounting expert with our full accounting dictionary below:

Social Accounting

Social accounting is the process of accounting for the social and environmental impacts of an organization’s activities. It goes beyond traditional fina…

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Security

A security is a tradable asset of any kind. In accounting, security refers to any form of financial instrument that can be traded. A security is a contr…

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Sales Journal

Sales journal is a book of original entries in which transactions relating to sales are recorded. It is also known as the “book of sales.” Sales journal…

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Revenue Recognition

Revenue recognition is the accounting process of recognizing revenue earned. This involves recording sales or other transactions as revenue on the compa…

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Project Accounting

Project accounting is a system that allows businesses to track the financial progress of specific projects. This type of accounting can give businesses …

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Positive Assurance

Positive assurance is a type of accounting that helps to ensure the accuracy of financial statements. This is done by providing third-party verification…

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Payroll

Payroll refers to the process of calculating and distributing employee wages. This process can be completed manually or through payroll software. Payrol…

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Positive Accounting

Positive accounting is the branch of accounting that attempts to explain and predict accounting phenomena from a positive perspective, rather than from …

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Pro-Forma Amount

The pro-forma amount is the estimated or projected value of something. In accounting, pro-forma amounts are often used to estimate future income or expe…

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P/E Ratio

The P/E ratio, or price-to-earnings ratio, is a financial metric used to assess the relative value of a company’s stock. The ratio is calculated by divi…

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Petty Cash

Petty cash is a small amount of money that businesses keep on hand for minor, everyday expenses. The petty cash fund is usually kept in a lockbox or dra…

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Outline of Business

The Outline of Business is a tool used in accounting that provides a high-level overview of a company’s financial activities. It can be used to help ass…

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Operating Expense

Operating expenses are the costs associated with running a business on a day-to-day basis. This can include everything from rent and utilities to salari…

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Online Accounting

Online accounting is the process of recording, storing, and retrieving financial transactions via the internet. It allows businesses to manage their fin…

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Oberac

Oberac is an accounting term that refers to the owner’s equity in a business. This can be calculated by subtracting the liabilities from the assets. Obe…

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Net Income

Net income is a company’s total earnings or profit. This figure is calculated by subtracting all expenses from revenue. Net income can be positive or ne…

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Negative Assurance

Negative assurance is a type of accounting assurance that focuses on what could go wrong, rather than on what could go right. Negative assurance is typi…

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Materiality

Materiality refers to the magnitude of an accounting error that, in the view of management, could influence the economic decisions of users taken on the…

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Matching Principle

The accounting principle requires expenses to be matched with revenues in the period in which the revenue is earned. The matching principle is used in a…

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Maker-Checker

The Maker-Checker accounting system is a system in which two people are responsible for each transaction. The “maker” is responsible for creating the tr…

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Journal

A journal is a record of the financial transactions of a business or individual. Transactions are recorded in chronological order, and each entry is typ…

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Long-Term Asset

An accounting long-term asset is an account that represents the company’s investment in property, plant, and equipment (PP&E) that will be used for prod…

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Inventory

Inventory refers to the goods and materials that a business has on hand. Inventory is considered to be a current asset on the balance sheet, and it is o…

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Job Costing

Job costing is an accounting system that tracks the costs associated with a specific job or project. This information can be used to determine the profi…

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Liability

Liability is defined as a person or thing against which a claim or debt is held. In accounting, liabilities are money owed by an individual, company or …

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Invoices

An invoice is a document that records the sale of goods or services. It typically includes the quantity and price of the items sold, as well as the date…

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