You are on page 1of 3

Account

General Journal
The general journal is where double entry bookkeeping entries are recorded by
debiting one or more accounts and crediting another one or more accounts with the
same total amount. The total amount debited and the total amount credited should
always be equal, thereby ensuring the accounting equation is maintained.[1]
Depending on the business's accounting information system, specialized journals
may be used in conjunction with the general journal for record-keeping. In such
case, use of the general journal may be limited to non-routine and adjusting entries.
A general journal entry includes:
1. The date of the transaction;
2. Titles of the accounts debited and credited;
3. The amount of each debit and credit; and,
4. An explanation of the transaction also known as a Narration.

20 Basic Accounting Terms, Acronyms and Abbreviations Students Should


Know
Basic Accounting Terms List
1. Accounts Receivable AR
Definition: The amount of money owed by your customers after goods or services
have been delivered and/or used. See how it works here.
2. Accounting ACCG
Definition: A systematic way of recording and reporting financial transactions.
3. Accounts Payable AP
Definition: The amount of money you owe creditors (suppliers, etc.) in return for
good and/or services they have delivered. See how it works here.
4. Assets (Fixed and Current) FA and CA

Definition: Current assets are those that will be used within one year. Typically this
could be cash, inventory or accounts receivable. Fixed assets (non current) are more
long-term and will likely provide benefits to a company for more than one year, such
as a building, land or machinery.
5. Balance Sheet BS
Definition: A financial report that summarizes a company's assets (what it owns),
liabilities (what it owes) and owners equity at a given time.
6. Capital CAP
Definition: A financial asset and its value, such as cash or goods. Working capital is
calculated by taking your current assets subtracted from current liabilities.
10. Credit CR
Definition: An accounting entry that may either decrease assets or increase
liabilities and equity on the company's balance sheet, depending on the transaction.
When using the double-entry accounting method there will be two recorded entries
for every transaction: a credit and a debit.
11. Debit DR
Definition: An accounting entry where there is either an increase in assets or a
decrease in liabilities on a company's balance sheet.
12. Expenses (Fixed, Variable, Accrued, Operation) FE, VE, AE, OE
Definition: The fixed, variable, accrued or day-to-day costs that a business may
incur through its operations. Examples of expenses include payments to banks,
suppliers, employees or equipment.
13. Generally Accepted Accounting Principles GAAP
Definition: A set of rules and guidelines developed by the accounting industry for
companies to follow when reporting financial data. Following these rules is
especially critical for all publicly traded companies.
14. General Ledger GL
Definition: A complete record of the financial transactions over the life of a
company.
15. Liabilities (Current and Long-Term) CL and LTL
Definition: A company's debts or financial obligations it incurred during business
operations. Current liabilities are those debts that are payable within a year, such as

a debt to suppliers. Long-term liabilities are typically payable over a period of time
greater than one year. An example of a long-term liability would be a bank loan.
16. Net Income NI
Definition: A company's total earnings, also called net profit or the bottom line.
Net income is calculated by subtracting totally expenses from total revenues.
17. Owner's Equity OE
Definition: An owners equity is typically explained in terms of the percentage
amount of stock a person has ownership interest in the company. The owners of the
stock are commonly referred to as the shareholders.
19. Profit and Loss Statement P&L
Definition: A financial statement that is used to summarize a companys
performance and financial position by reviewing revenues, costs and expenses
during a specific period of time; such a quarterly or annually.

TIPS:
Active participation (answer based on what you think is the answer; no right or
wrong answer)
Ask right away when you encounter a term
Ask what is his preference, reading first then lecture or lecture first then read?