Unit 3: Vocabulary

Please study the 14 vocabulary terms below. Then press the Mark Complete button to continue.
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asset
a resource in the possession of a company which is available for use
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The auditors checked the factory to make sure that all the assets listed in the accounts were there.
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authorise
to give permission to happen
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All purchases over five thousand dollars must be authorised by accounts payable.
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daybooks
a journal of financial transactions entered on the day that they happened
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I hate working with daybooks, it is so much easier to use a computerised accounting system.
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double entry bookkeeping
a system of keeping financial records where each transaction has a debit and a credit posted
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The majority of experienced bookkeepers use double entry bookkeeping as it allows them to check that both sides agree.
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ensure
to make certain that something happens
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All business owners should ensure that their tax returns are received by the Inland Revenue by 31st April.
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expenditure
all monies spent
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The director stopped the lunch programme for employees so he could reduce expenditure and save money.
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income
all monies received
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The company is looking for a way to increase its income, so they are talking about expanding into a new market.
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incorrect
wrong, false
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John wasn't paying attention so the answer he got was incorrect.
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liability
a company's debt or obligation
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The company shut down when the accounts showed that the liabilities were larger than the income and assets.
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nominal code
a reference number which allows the grouping of financial transactions
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It took me ages to remember all of the nominal codes, but now I do it is much quicker to enter invoices into the system.
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post
to make an entry in an accounting ledger or software system
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When you post a transaction in the system, the programme will automatically post the second side of it.
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return
a form which is submitted to a tax authority
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When James had finished the clients' tax return he gave it to his supervisor to check before sending to the Inland Revenue.
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single entry bookkeeping
a simple system of keeping financial records, where transactions are entered only once
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As Bob wasn't very good at maths he used single entry bookkeeping to keep track of his daily transactions.
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T-accounts
an informal word for a set of financial records using double entry bookkeeping, with debits entered on the left and credits on the right
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You should remember that each T-account should balance. If it doesn't, there must be a mistake somewhere.
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