Glossary

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W

 


A

Account
a record summarizing all the information pertaining to a single item in the accounting equation
Account balance
the amount in an account
Account number
the number assigned to an account Account title the name given to an account
Accounting
planning, recording, analyzing, and interpreting financial information
Accounting cycle
the series of accounting activities included in recording financial information for a fiscal period
Accounting equation
an equation showing the relationship among assets, liabilities, and owner’s equity
Accounting period
see Fiscal period
Accounting records
organized summaries of a business’s financial activities
Accounting system
a planned process for providing financial information that will be useful to management Accounts expenses expenses incurred in one fiscal period but not paid until a later fiscal period
Accounts payable ledger
a subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account
Accounts receivable ledger
a subsidiary ledger containing only accounts for charge customers
Accounts receivable turnover ratio
the number of times the average amount of accounts receivable is collected during a specified period
Accrual basis of accounting
the accounting method that records revenues when they are earned and expenses when they are incurred Accrued expenses expenses incurred in one fiscal period but not paid until a later fiscal period
Accrued interest expense
interest incurred but not yet paid
Accrued interest
income interest earned but not yet received
Accrued revenue
revenue earned in one fiscal period but not received until a later fiscal period
Accumulated depreciation
the total amount of depreciation expense that has been recorded since the purchase of a plant asset
Acid-test ratio
a ratio that shows the numeric relationship of quick assets to current liabilities
Adjusting entries
journal entries recorded to update general ledger accounts at the end of a fiscal period
Adjustments
changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
Administrative expenses budget schedule
a statement that shows the projected expenses for all operating expenses not directly related to selling operations
Aging accounts receivable
analyzing accounts receivable according to when they are due
Amortization
recognizing a portion of an expense in each of several years
Appropriations
authorizations to make expenditures for specified purposes
Articles of incorporation
a written application requesting permission to form a corporation
Assessed value
the value of an asset determined by tax authorities for the purpose of calculating taxes
Asset
anything of value that is owned
Auditing
the independent reviewing and issuing of an opinion on the reliability of accounting records
Auditor
a person who examines the records that support the financial records of a business to assure that generally accepted accounting principles (GAAP) are being followed
Automatic check deposit
depositing payroll checks directly to an employee’s checking or savings account in a specific bank


B

Bad debts
see Uncollectible accounts
Balance sheet
a financial statement that reports assets, liabilities, and owner’s equity on a specific date
Bank statement
a report of deposits, withdrawals, and bank balances sent to a depositor by a bank
Bill of exchange
see Draft
Bill of lading
a receipt signed by the authorized agent of a transportation company for merchandise received that also serves as a contract for the delivery of the merchandise
Blank endorsement
an endorsement consisting only of the endorser’s signature
Board of directors
a group of persons elected by the stockholders to manage a corporation
Bond
a printed, long-term promise to pay a specified amount on a specific date and to pay interest at stated intervals
Bond issue
all the bonds representing the total amount of a loan
Bond sinking fund
an amount set aside to pay a bond issue when due
Book inventory
see Perpetual inventory
Book value
the difference between an asset’s account balance and its related contra account balance
Book value of a plant asset
the original cost of a plant asset minus accumulated depreciation
Book value of accounts receivable
the difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts
Book value per share
see Equity per share
Breakeven point
the amount of sales at which net sales is exactly the same as total costs
Budget
a written financial plan of a business for a specific period of time, expressed in dollars
Budget period
the length of time covered by a budget
Budgeted income statement
a statement that shows a company’s projected sales, costs, expenses, and net income
Budgeting planning
the financial operations of a business

C

Capital
the account used to summarize the owner’s equity in a business
Capital stock
total shares of ownership in a corporation
Cash basis of accounting
the accounting method that records revenues when they are received and expenses when they are paid
Cash budget
a statement that shows for each month or quarter a projection of a company’s beginning cash balance, cash receipts, cash payments, and ending cash balance
Cash discount
a deduction from the invoice amount, allowed by a vendor to encourage early payment
Cash flows
the cash receipts and cash payments of a company
Cash over
a petty cash on hand amount that is more than a recorded amount
Cash payments budget schedule
projected cash payments
Cash payments journal
a special journal used to record only cash payment transactions
Cash receipts budget schedule
projected cash receipts
Cash receipts journal
a special journal used to record only cash receipt transactions
Cash sale
a sale in which cash is received for the total amount of the sale at the time of the transaction
Cash short
a petty cash on hand amount that is less than a recorded amount
Certificate of deposit
a document issued by a bank as evidence of money invested with the bank
Charge sale
see Sale on account
Chart of accounts
a list of accounts used by a business
Charter
the approved articles of incorporation
Check
a business form ordering a bank to pay cash from a bank account
Check register
a journal used in a voucher system to record cash payments
Checking account
a bank account from which payments can be ordered by a depositor
Closing entries
journal entries used to prepare temporary accounts for a new fiscal period
Commercial invoice
a statement prepared by the seller of merchandise addressed to the buyer, showing a detailed listing and description of merchandise sold, including prices and terms
Common stock
stock that does not give stockholders any special preferences
Comparative income statement
an income statement containing sales, cost, and expense information for two or more years
Component percentage
the percentage relationship between one financial statement item and the total that includes that item
Consignee
the person or business who receives goods on consignment
Consignment
goods that are given to a business to sell, but for which title to the goods remains with the vendor
Consignor
the person or business who gives goods on consignment
Contra account
an account that reduces a related account on a financial statement
Contra balance
an account balance that is opposite the normal balance
Contract of sale
a document that details all the terms agreed to by seller and buyer for a sales transaction
Contribution margin
income determined by subtracting all variable costs from net sales
Controlling account
an account in a general ledger that summarizes all accounts in a subsidiary ledger
Corporation
an organization with the legal rights of a person and which may be owned by many persons
Correcting entry
a journal entry made to correct an error in the ledger
Cost accounting
the determination and control of costs of a business enterprise
Cost ledger
a ledger containing all cost sheets for products in the process of being manufactured
Cost of goods sold
see Cost of merchandise sold
Cost of merchandise
the price a business pays for goods it purchases to sell
Cost of merchandise sold
the total original price of all merchandise sold during a fiscal period
Credit
an amount recorded on the right side of a T account
Credit card sale
a sale in which a credit card is used for the total amount of the sale at the time of the transaction
Credit memorandum
a form prepared by the vendor showing the amount deducted for returns and allowances
Creditor
a person or organization to whom a liability is owed
Current assets
cash and other assets expected to be exchanged for cash or consumed within a year
Current liabilities
liabilities due within a short time, usually within a year
Current ratio
a ratio that shows the numeric relationship of current assets to current liabilities
Customer
a person or business to whom merchandise or services are sold

D

Date of a note
the day a note is signed
Date of declaration
the date on which a board of directors votes to distribute a dividend
Date of payment
the date on which dividends are actually to be paid to stockholders
Debit
an amount recorded on the left side of a T account
Debit card
a bank card that, when making purchases, automatically deducts the amount of the purchase from the checking account of the cardholder
Debit memorandum
a form prepared by the customer showing the price deduction taken by the customer for returns and allowances
Debt ratio
the ratio found by dividing total liabilities by total assets
Declaring a dividend
action by a board of directors to distribute corporate earnings to stockholders
Declining-balance method of depreciation
multiplying the book value by a constant depreciation rate at the end of each fiscal period
Deferred revenue
see Unearned revenue
Deficit
the amount by which allowances to partners exceed net income
Departmental accounting system
an accounting system showing accounting information for two or more departments
Departmental margin
the revenue earned by a department less its cost of merchandise sold and less its direct expenses
Departmental margin statement
a statement that reports departmental margin for a specific department
Departmental statement of gross profit
a statement prepared at the end of a fiscal period showing the gross profit for each department
Depletion
the decrease in the value of a plant asset because of the removal of a natural resource
Depreciation expense
the portion of a plant asset’s cost that is transferred to an expense account in each fiscal period during a plant asset’s useful life
Direct expense
an operating expense identifiable with and chargeable to the operation of a specific department
Direct labor
salaries of factory workers who make a product
Direct materials
materials that are of significant value in the cost of and that become an identifiable part of a finished product
Direct write-off method of recording losses from uncollectible accounts
recording uncollectible accounts expense only when an amount is actually known to be uncollectible
Discount on capital stock
an amount less than par or stated value at which capital stock is sold
Dishonored check
a check that a bank refuses to pay
Dishonored note
a note that is not paid when due
Distribution of net income statement
a partnership financial statement showing net income or loss distribution to partners Dividends earnings distributed to stockholders Double-entry accounting the recording of debit and credit parts of a transaction Doubtful accounts see Uncollectible accounts Draft a written, signed, and dated order from one party ordering another party, usually a bank, to pay money to a third party

E

Earnings per share
the amount of net income belonging to a single share of stock
Electronic funds transfer
a computerized cash payments system that uses electronic impulses to transfer funds
Employee benefits
payments to employees for non-working hours and to insurance and retirement programs
Employee earnings record
a business form used to record details affecting payments made to an employee
Encumbrance
a commitment to pay for goods or services that have been ordered but not yet provided
Endorsement
a signature or stamp on the back of a check transferring ownership Endorsement in full see Special endorsement
Entry
information for each transaction recorded in a journal
Equities
financial rights to the assets of a business
Equity per share
the amount of total stockholders’ equity belonging to a single share of stock
Equity ratio
the ratio found by dividing stockholders’ equity by total assets
Estimated salvage value
the amount an owner expects to receive when a plant asset is removed from use
Ethics
the principles of right and wrong that guide an individual in making decisions Exhibit see Supporting schedule
Expenditures
cash disbursements and liabilities incurred for the cost of goods delivered or services rendered
Expense
a decrease in owner’s equity resulting from the operation of a business
Exports
goods or services shipped out of a seller’s home country to a foreign country

F

Face amount
see Principal of a note
Factory overhead
all expenses other than direct materials and direct labor that apply to the making of products
Federal unemployment tax
a federal tax used for state and federal administrative expenses of the unemployment program
Fifo
see First-in, first-out inventory costing method
File maintenance
the procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
Financial accounting
the recording of a business’s financial activities and the periodic preparation of financial reports
Financing activities
cash receipts and payments involving debt or equity transactions
Finished goods
manufactured products that are fully completed
Finished goods ledger
a ledger containing records of all finished goods on hand
First-in, first-out inventory costing method
using the price of merchandise purchased first to calculate the cost of merchandise sold first
Fiscal period
the length of time for which a business summarizes and reports financial information
Fixed assets
see Plant assets
Fixed costs
total costs that remain constant regardless of change in business activity
Fund
a governmental accounting entity with a set of accounts in which assets always equal liabilities plus equities

G

Gain on plant assets
revenue that results when a plant asset is sold for more than book value
General amount column
a journal amount column that is not headed with an account title
General fixed assets
governmental properties that benefit future periods
General journal
a journal with two amount columns in which all kinds of entries can be recorded
General ledger
a ledger that contains all accounts needed to prepare financial statements
Goodwill
the value of a business in excess of the total investment of owners
Gross earnings
see Total earnings
Gross pay
see Total earnings
Gross profit method of estimating inventory
estimating inventory by using the previous year’s percentage of gross profit on operations
Gross profit on sales
the revenue remaining after cost of merchandise sold has been deducted

H

Horizontal analysis
see Trend analysis


I

Imports
goods or services bought from a foreign country and brought into a buyer’s home country
Income statement
a financial statement showing the revenue and expenses for a fiscal period
Indirect expense
an operating expense chargeable to overall business operations and not identifiable with a specific department
Indirect labor
salaries paid to factory workers who are not actually making products
Indirect materials
materials used in the completion of a product that are of insignificant value to justify accounting for separately
Intangible assets
assets of a non-physical nature that have value for a business
Interest
an amount paid for the use of money for a period of time
Interest expense
the interest accrued on money borrowed
Interest income
the interest earned on money loaned
Interest rate of a note
the percentage of the principal that is paid for use of the money
Interim departmental statement of gross profit
a statement showing gross profit for each department for a portion of a fiscal period
Internal auditor
see Auditor
Inventory
the amount of goods on hand
Inventory record
a form used during a periodic inventory to record information about each item of merchandise on hand
Investing activities
cash receipts and cash payments involving the sale or purchase of assets used to earn revenue over a period of time
Invoice
a form describing the goods or services sold, the quantity, and the price

J

Journal
a form for recording transactions in chronological order
Journalizing
recording transactions in a journal

L

Last-in, first-out inventory costing method
using the price of merchandise purchased last to calculate the cost of merchandise sold first
Ledger
a group of accounts
Letter of credit
a letter issued by a bank guaranteeing that a named individual or business will be paid a specified amount, provided stated conditions are met
Liability
an amount owed by a business
Lifo
see Last-in, first-out inventory costing method
Liquidation of a partnership
the process of paying a partnership’s liabilities and distributing remaining assets to the partners
List price
a business’s printed or catalog price
Long-term assets
see Plant assets Long-term liabilities liabilities owed for more than a year
Loss on plant assets
the loss that results when a plant asset is sold for less than book value
Lower of cost or market inventory costing method
using the lower of cost or market price to calculate the cost of ending merchandise inventory

M

MACRS
see Modified Accelerated Cost Recovery System
Maker of a note
the person or business who signs a note and thus promises to make payment
Management advisory services
management advice provided to an organization by a private accountant
Managerial accounting
the analysis, measurement, and interpretation of financial accounting information
Marginal income
see Contribution margin
Market value
the price at which a share of stock may be sold on the stock market Markup the amount added to the cost of merchandise to establish the selling price Materials ledger a ledger containing all records of materials
Maturity date of a note
the date a note is due
Maturity value
the amount that is due on the maturity date of a note
Memorandum
a form on which a brief message is written describing a transaction
Merchandise
goods that a merchandising business purchases to sell
Merchandise inventory
the amount of goods on hand for sale to customers
Merchandise inventory turnover ratio
the number of times the average amount of merchandise inventory is sold during a specific period of time
Merchandising business
a business that purchases and sells goods
Modified Accelerated Cost Recovery System
a depreciation method required by the Internal Revenue Service to be used for income tax calculation purposes for most plant assets placed in service after 1986
Mutual agency
the right of all partners to contract for a partnership

N

Net income
the difference between total revenue and total expenses when total revenue is greater
Net loss
the difference between total revenue and total expenses when total expenses is greater
Net pay
the total earnings paid to an employee after payroll taxes and other deductions
Net purchases
total purchases less purchases discount and purchases returns and allowances
Net sales
total sales less sales discount and sales returns and allowances
No-par-value stock
a share of stock that has no authorized value printed on the stock certificate
Nominal accounts
see Temporary accounts
Nonprofit organization
see Not-for-profit organization
Normal balance
the side of the account that is increased
Not-for-profit organization
an organization providing goods or services with neither a conscious motive nor expectation of earning a profit
Note
see Notes payable
Notes payable
promissory notes signed by a business and given to a creditor
Notes receivable
promissory notes that a business accepts from customers
Number of a note
the number assigned to identify a specific note

O

Opening an account
writing an account title and number on the heading of an account
Operating activities
the cash receipts and payments necessary to operate a business on a day-to-day basis
Operating budget
a plan of current expenditures and the proposed means of financing those expenditures
Organization costs
fees and other expenses of organizing a corporation
Other revenue and expenses
budget schedule budgeted revenue and expenses from activities other than normal operations
Overapplied overhead
the amount by which applied factory overhead is more than actual factory overhead
Overhead
see Factory overhead
Owner’s equity
the amount remaining after the value of all liabilities is subtracted from the value of all assets
Owners’ equity statement
a financial statement that summarizes the changes in owners’ equity during a fiscal period

P

Par value
a value assigned to a share of stock and printed on the stock certificate
Par-value stock
a share of stock that has an authorized value printed on the stock certificate
Partner
each member of a partnership
Partnership
a business in which two or more persons combine their assets and skills
Partnership agreement
a written agreement setting forth the conditions under which a partnership is to operate
Pay period
the period covered by a salary payment
Payee of a note
the person or business to whom the amount of a note is payable Payroll the total amount earned by all employees for a pay period
Payroll register
a business form used to record payroll information Payroll taxes taxes based on the payroll of a business
Performance report
a report showing a comparison of projected and actual amounts for a specific period of time
Periodic inventory
a merchandise inventory determined by counting, weighing, or measuring items of merchandise on hand
Permanent accounts
accounts used to accumulate information from one fiscal period to the next
Perpetual inventory
a merchandise inventory determined by keeping a continuous record of increases, decreases, and balance on hand
Personal financial planning
assisting individuals in managing their personal investments
Personal property
all property not classified as real property
Petty cash
an amount of cash kept on hand and used for making small payments
Petty cash slip
a form showing proof of a petty cash payment
Physical inventory
see Periodic inventory
Plant asset record
an accounting form on which a business records information about each plant asset
Plant assets
assets that will be used for a number of years in the operation of a business
Post-closing trial balance
a trial balance prepared after the closing entries are posted
Postdated check
a check with a future date on it
Posting
transferring information from a journal entry to a ledger account
Preferred stock
stock that gives stockholders preference in earnings and other rights Prepaid expenses expenses paid in one fiscal period but not reported as expenses until a later fiscal period
Price-earnings ratio
the relationship between the market value per share and earnings per share of a stock
Principal of a note
the original amount of a note; sometimes referred to as face amount of a note
Production-unit
method of depreciation calculating estimated annual depreciation expense based on the amount of production expected from a plant asset
Promissory note
a written and signed promise to pay a sum of money at a specified time
Proprietorship
a business owned by one person
Proving cash
determining that the amount of cash agrees with the accounting records
Purchase invoice
an invoice used as a source document for recording a purchase on account transaction
Purchase order
a completed form authorizing a seller to deliver goods with payment to be made later
Purchases allowance
credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer’s accounts payable
Purchases budget schedule
a statement prepared to show the projected amount of purchases that will be required during a budget period
Purchases discount
a cash discount on purchases taken by a customer
Purchases journal
a special journal used to record only purchases of merchandise on account
Purchases return
credit allowed for the purchase price of returned merchandise, resulting in a decrease in the customer’s accounts payable

Q

Quick assets
those current assets that are cash or that can be quickly turned into cash

R

Rate earned on average stockholders’ equity
the relationship between net income and average stockholders’ equity
Rate earned on average total assets
the relationship between net income and average total assets
Rate earned on net sales
the rate found by dividing net income after federal income tax by net sales
Ratio
a comparison between two numbers showing how many times one number exceeds the other
Real accounts
see Permanent accounts
Real estate
see Real property
Real property
land and anything attached to the land
Realization
cash received from the sale of assets during liquidation of a partnership
Receipt
a business form giving written acknowledgement for cash received
Residual value
see Estimated salvage value
Responsibility accounting
assigning control of business revenues, costs, and expenses as a responsibility of a specific manager
Responsibility statements
financial statements reporting revenue, costs, and direct expenses under a specific department’s control
Restrictive endorsement
an endorsement restricting further transfer of a check’s ownership
Retail merchandising business
a merchandising business that sells to those who use or consume the goods
Retail method of estimating inventory
estimating inventory by using a percentage based on both cost and retail prices
Retained earnings
an amount earned by a corporation and not yet distributed to stockholders
Retiring a bond issue
paying the amounts owed to bondholders for a bond issue
Revenue
an increase in owner’s equity resulting from the operation of a business
Reversing entry
an entry made at the beginning of one fiscal period to reverse an adjusting entry made in the previous fiscal period

S

Salary
the money paid for employee services
Sale on account
a sale for which cash will be received at a later date
Sales allowance
credit allowed a customer for part of the sales price of merchandise that is not returned, resulting in a decrease in the vendor’s accounts receivable
Sales budget schedule
a statement that shows the projected net sales for a budget period
Sales discount
a cash discount on sales
Sales invoice
an invoice used as a source document for recording a sale on account
Sales journal
a special journal used to record only sales of merchandise on account
Sales mix
relative distribution of sales among various products
Sales return
credit allowed a customer for the sales price of returned merchandise, resulting in a decrease in the vendor’s accounts receivable
Sales slip
see Sales invoice
Sales tax
a tax on a sale of merchandise or services
Salvage value
see Estimated salvage value
Schedule of accounts payable
a listing of vendor accounts, account balances, and total amount due all vendors
Schedule of accounts receivable
a listing of customer accounts, account balances, and total amount due from all customers
Scrap value
see Estimated salvage value
Selling expenses budget schedule
a statement prepared to show projected expenditures related directly to the selling operations
Serial bonds
portions of a bond issue that mature on different dates
Service business
a business that performs an activity for a fee
Share of stock
each unit of ownership in a corporation
Sight draft
a draft payable on sight when the holder presents it for payment
Sole proprietorship
see Proprietorship
Source document
a business paper from which information is obtained for a journal entry
Special amount column
a journal amount column headed with an account title
Special endorsement
an endorsement indicating a new owner of a check
Special journal
a journal used to record only one kind of transaction
Statement of cash flows
a statement that summarizes cash receipts and cash payments resulting from business activities during a fiscal period
Statement of cost of goods manufactured
a statement showing details about the cost of finished goods
Statement of stockholders’ equity
a financial statement that shows changes in a corporation’s ownership for a fiscal period
Stock certificate
written evidence of the number of shares each stockholder owns in a corporation
Stock ledger
a file of stock records for all merchandise on hand
Stock record
a form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand
Stockholder
an owner of one or more shares of a corporation
Stockholders’ equity
value of the owners’ equity in a corporation
Straight-line method of depreciation
charging an equal amount of depreciation expense for a plant asset in each year of useful life
Subscribing for capital stock
entering into an agreement with a corporation to buy capital stock and pay at a later date
Subsidiary ledger
a ledger that is summarized in a single general ledger account
Sum-of-the-years-digits method of depreciation
using fractions based on years of a plant asset’s useful life Supplementary report see Supporting schedule
Supporting schedule
a report prepared to give details about an item on a principal financial statement

T

T account
an accounting device used to analyze transactions
Taking an inventory
see Periodic inventory
Tax accounting
the preparation of tax returns as well as tax planning
Tax base
the maximum amount of earnings on which a tax is calculated
Tax levy
authorized action taken by a governmental organization to collect taxes by legal authority Temporary accounts accounts used to accumulate information until it is transferred to the owner’s capital account Term bonds bonds that all mature on the same date
Terms of sale
an agreement between a buyer and a seller about payment for merchandise
Time draft
a draft that is payable at a fixed or determinable future time after it is accepted
Time of a note
the days, months, or years from the date of signing until a note is to be paid
Total costs
all costs for a specific period of time
Total earnings
the total pay due for a pay period before deductions
Trade acceptance
a form signed by a buyer at the time of a sale of merchandise in which the buyer promises to pay the seller a specified sum of money, usually at a stated time in the future
Trade discount
a reduction in the list price granted to customers
Transaction
a business activity that changes assets, liabilities, or owner’s equity
Treasury stock
a corporation’s own stock that has been issued and reacquired
Trend analysis
a comparison of the relationship between one item on a financial statement and the same item on a previous fiscal period’s financial statement
Trial balance
a proof of the equality of debits and credits in a general ledger
Trustee
a person or institution, usually a bank, who is given legal authorization to administer property for the benefit of property owners

U

Uncollectible accounts
accounts receivable that cannot be collected
Underapplied overhead
the amount by which applied factory overhead is less than actual factory overhead
Unearned revenue
revenue received in one fiscal period but not earned until the next fiscal period Unit cost an amount spent for one of a specific product or service


V

Variable costs
total costs that change in direct proportion to a change in the number of units
Vendor
a business from which merchandise is purchased or supplies or other assets are bought
Vertical analysis
see Component percentage
Voucher
a business form used to show an authorized person’s approval for a cash payment
Voucher check
a check with space for writing details about a cash payment
Voucher jacket
see Voucher
Voucher register
a journal used to record vouchers
Voucher system
a set of procedures for controlling cash payments by preparing and approving vouchers before payments are made

W

Weighted-average inventory costing method
using the average cost of beginning inventory plus merchandise purchased during a fiscal period to calculate the cost of merchandise sold
Wholesale merchandising business
a business that buys and resells merchandise to retail merchandising businesses
Withdrawals
assets taken out of a business for the owner’s personal use
Withholding allowance
a deduction from total earnings for each person legally supported by a taxpayer, including the employee
Work in process
products that are being manufactured but are not yet complete
Work sheet
a columnar accounting form used to summarize the general ledger information needed to prepare financial statements
Working capital
the amount of total current assets less total current liabilities
Writing off an account
canceling the balance of a customer account because the customer does not pay