Imprest system A method of controlling petty cash by keeping a 'float' which is topped up at intervals.

Balancing The process of inserting a closing balance into the ledger account to show the net value of the account at a specific date.

Account The individual record contained within the ledger.

Books of prime entry The location of the first stage of the bookkeeping process: the cash book, petty cash book, day books and journal.

Closing off Balancing accounts at the end of a financial period.

Trial balance A list of all the account balances, divided between debit and credit balances at a specific time. If the total debit balances equal the total credit balances, the trial balance is said to 'agree' and shows that the arithmetic of all the entries is correct. It is not a perfect check of overall accuracy.

Credit The right-hand side of a ledger account. Liability, capital and income accounts have credit balances. Abbreviated to Cr.

Cash book The book containing the bank account and cash account. Part of the general (impersonal) ledger.

Debit The left-hand side of a ledger account. Asset and expenses accounts have debit balances.
Abbreviated to Dr.

General ledger The impersonal ledger containing accounts for capital and types of assets, expenses, liabilities and revenue. Also known as the nominal ledger.

Impersonal ledger The general (or nominal) ledger.

Journal A book of prime entry used to record the correction of errors and other adjustments between ledger accounts.

Ledger A collection of individual records known as accounts.

Nominal ledger Another name for the general ledger.

Personal ledgers The Receivables (Debtors) and Payables (Creditors) ledgers, containing the individual accounts of customers and suppliers who trade on credit terms.

Payable A supplier of goods or services who is owed money by the business. Also known as a creditor.

Petty cash Small items of expenditure, usually shown in a separate book.

Posting A word used to describe the entering of information in the double-entry system.

Receivable A customer or client who owes an amount to the business. Also known as a debtor.

Analysed cash book or petty cash book A cash book or petty cash book with additional columns to enable similar payments to be grouped together to reduce the amount of bookkeeping entries needed.

T-account Simple representation of the layout of a ledger account.

Purchases The name of an account in the general ledger which records goods bought for resale.

See Also:
Accounting Glossary and Definition
Books of prime entry

See Also: