Glossary - Accounting Software Secrets
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Account – The basis for dividing transaction information into useable subtotals in the general ledger.  The account is a descriptive label to organize the financial affairs of the business.


Account Type – Highest level of groupings for subtotals on the financial reports.  Each account on the Chart of Accounts will be required to choose one from the 15 types of accounts.  Examples include: bank, other current asset, equity, income, etc.


Accounts Receivable – Money due to the company from the customers.  In QuickBooks any transactions coded to an Accounts Receivable type account will require a customer in the entry.


Accrual Basis – is a method of recording revenue as it is earned (regardless of when it is actually received) and expenses are recorded as incurred (regardless of when it is actually paid).  Most businesses that carry inventory are required to use the accrual basis of accounting.  For management purposes the accrual method is usually preferable due to the fact that it matches the revenue and expenses in the same period regardless of when they were paid.


Activities – Specific tasks to be completed within QuickBooks.


Adjusted Trial Balance – A listing by account and balance as of a specific date where the debit and credit totals agree.  There are two columns for the beginning balances, two columns for the adjustments entered during the specific period, and then two columns for the ending account balance.


Audit Trail – A specific report that shows the user name, last entered/modified date and time for individual transactions.  If this preference is turned on, the report will also show the previous transaction before it was modified.


Back Up – A process of saving the file in case it is needed in the future.  The best back up procedures includes taking the saved file off-site.


Balances – the net total amount as of a specific date as it relates to an account.


Balance Sheet – 1) A report that shows the balances of assets owned by the company, liabilities owed by the company, and resulting equity of the owners in the company as of a specific date; 2) In the most basic form: Assets = Liabilities + Equity, 3) This report is also called a Statement of Financial Position.


Bill – Documentation received from a Vendor (A/P) that details amounts owed for a specific transaction.  Note: in some accounting software packages this type of transaction is called an invoice.  To eliminate possible confusion, in QuickBooks a bill deals with a vendor and an invoice deals with a customer.


Bill Payment – the disbursement from the bank account to relieve the debt owed to a vendor.  The process actually marks the corresponding bill as paid.


Business Entity – see also Company


Cash Basis – is a method of recording income as it is received and expenses as they are paid.  Many service businesses use this method for tax purposes.  In QuickBooks this is usually achieved through simply entering checks and deposits, either on the forms, or directly into the register.  Using this approach, it is not possible to generate accrual basis statements from the transactional data that has been entered.



Cash Sales Receipt – Sale to a customer that is paid immediately.  This form in QuickBooks permits recording the items that were sold at the same time as the money received is recorded.


Check – A form used in QuickBooks for cash disbursement activity.  This type of transaction will typically have a number that corresponds to a hand written or computer printed check.  This transaction type can also be used without a physical check number (left blank or alpha-numeric digits) for electronic withdrawals from the bank account.


Class – A way of dividing the business into various segments also called Department, Division, Location, Profit Center, Etc.


Cleared – In QuickBooks, once a transaction has been reconciled, it is marked in the register with a check mark in the cleared column.  Once a transaction has been cleared, it will no longer appear on the reconciliation screen.


Closing Date – This is the only way to “protect” prior periods from being changed by providing a warning message if the transaction date is equal or prior to the closing date.  It is optional to enter the date.  The date can be any valid date; it does not have to be a month end date.  QuickBooks does not require any formal closing procedures.  It is possible to leave many periods open at any given time.


Collapsed Statement – Show only the “main” accounts that includes transaction coded directly to the main account as well as any activity in the “sub-accounts”


Company – 1) a specific type of business entity, usually recognized by a governmental agency with a tax identification number; 2) a specific QuickBooks data file


Conversion – 1) the process of changing from one accounting software or manual system to another; 2) the process of upgrading the QuickBooks file from an older version of the software to a newer one (see also update).


Credit – the right side of a “t-account” used for recording accounting transactions.  Credits to Asset accounts will decrease the balance where as credits to liability accounts will increase the balance.


Cursor – the graphical interface that indicates the position of the mouse pointer.  Typically a blinking vertical line to indicate where typing will be placed on the screen.


Customer – The purchaser of the goods and services sold by the company.


Customize – Changing QuickBooks based on specific business or user preferences.


Data Entry – The process of using the computer key board to complete transactional tasks in QuickBooks that results in the creation of a double entry bookkeeping system.


Data File – the single file that contains all of the QuickBooks list and transactional information for a business entity.


Debit – 1) the left side of a “t-account” used for recording accounting transactions.  Debits to Asset accounts will increase the balance where as debits to liability accounts will decrease the balance; 2) part of a journal entry that is required for each transaction in a double entry bookkeeping system.


Deposit – 1) the process in QuickBooks of indicating money that will increase the bank account balance; 2) prepayment money received from a customer, also called a down payment or retainer.


Desktop – The information you see on the screen.  This view dictates the choices available.  For example, the computer desktop typically has shortcuts to the files or programs used most frequently; the QuickBooks desktop is the form, list, navigator, etc. that is currently shown to aid in navigating through the software.


East Step Interview – A feature that aids in the set up process by guiding the user through specific questions.  Specifically relates to creating a new company or setting up various payroll related aspects of the software.


Employee – A specific type of name that is created for the purpose of using the QuickBooks payroll functions.  This type of name is required for issuing paychecks or W-2 forms.


Enterprise Solution – Intuit “mid-size” business product.  This product has a user interface and feature set identical to Premier with the added benefits of increased capacity (each list has double the number of items allowed, the number of possible simultaneous users is 10, etc.) and data structure improvements to increase speed and stability.


Expanded Statement – Show all of the “detail” accounts


Fixed Assets – This includes the physical items that are owned by the business.  Property, Plant, and Equipment are examples.


Forms – the screens that customize QuickBooks to look like common business paperwork while performing the accounting functions of creating a journal entry with the debits and credits “behind the scenes” with no additional user intervention required.  Forms can be posting (checks, invoices, etc.) or non-posting (purchase orders, estimates, etc.).  For many forms, it is possible to control the information seen on the screen and when printed in QuickBooks by customizing the template.


General Ledger – The complete set of double entry bookkeeping records that results in information used for business decisions and compliance.


Hard drive – This is the hardware component of the computer where the operating system, software, and data are stored.


History – the linked transactions that result in a trail through the accounting records.  For example, the history for a payment received from a customer would include the invoice that was paid with that payment as well as the deposit when the payment was taken to the bank.


Importing – this is obtaining a file from the financial institution for the purposes of entering transactions into QuickBooks.  Many banks offer an IIF type of file, which simply imports the information that is provided in an Intuit approved format.  Still others offer QIF (Quicken format) that can be converted to an IIF format with an add-on product. With this method there are no logs of what has been done and there is not any error checking.


Integrating – since the release of the SDK (software development kit) by Intuit in 2001, many developers have used this information to develop add-on software products that enter information into the QuickBooks data file.  The advantage with this method is that the developer can build in error checking and transaction logs to verify what has actually happened.


Internal Control – safeguarding the assets of the company and the integrity of the accounting data.


Items – 1) an entry on any list; 2) a specific type of list used for tracking purchase and sale information.  Some examples include inventory items, non-inventory items, service items, etc. 3) any line on an estimate or an invoice that will have a dollar amount associated with it, requires an item.  Items can also be used for creating purchase reports.


Item Type – A way of designating between various groups of goods and services the business may buy and sell.  Examples include service type items, inventory items, or other charge items.


Invoice – Transaction type that provides information to a Customer (A/R) detailing what they owe for that individual purchase from the company.  Note: in some accounting software packages this type of transaction is called a bill.  To eliminate possible confusion, in QuickBooks a bill deals with a vendor and an invoice deals with a customer.


Journal Entry – The debit and credit transactional information necessary for recording activity in a double entry bookkeeping system.  In QuickBooks forms, the debit and credit balanced entries are created without specific user interaction.


Key Strokes – Using a combination of keys on the computer key board to efficiently navigate to a desired screen or accomplish a specific task in QuickBooks.


Linked – The process of tying together various forms to provide the “history” of a transaction.  An example is an invoice is “linked” to a receive payment that is “linked” to a deposit.


Lists – The highest level of organizational structure within QuickBooks.  Lists are required for certain types of entries and recommended for improving data entry efficiency.  Examples include customer list, item list, vendor list, etc.


Macintosh – An operating system used for QuickBooks Pro for the Mac.


Matching – by signing up for online banking, it is possible to use QuickBooks to access the QuickStatement online from the bank through the Online Banking Center.  QuickBooks then looks at check numbers first and amounts second to attempt to determine if the transaction has already been entered.  If the check number and amount agree (starting with the oldest transactions first) QuickBooks will designate the transaction as matched by placing a lightening bolt in the cleared column in the register.


Menu Bar – This feature is the top row of menu choices in QuickBooks to permit navigation to specific activities, reports, or features of the software.


Next – When on a form in QuickBooks, clicking on the “next” button will navigate to the form subsequent in date order.


Off-Site – Not with the bookkeeping records.  Typically off-site is in reference to keeping a back up away from the computer and business premises in case of a disaster.


Opening Balance Equity – A special clearing account used during the set up process for entering beginning balance sheet account balances.


Password – the code that is used in conjunction with the user name to access a password protected QuickBooks file.


Password Protection – This feature permits setting up multiple users to access the data file, and dictates what areas of the software they will have access to.  Used in conjunction with the closing date, the password protection feature can effectively keep all users, except the admin password, from making changes in closed periods.


Preferences: Company Preferences – Preferences that apply to the entire data file, regardless of the user who is logged in.  These preferences can only be modified when logged in using the admin user name and password.


Preferences: My Preferences – Preferences that are customized for a specific user name and password.


Previous – when on a form in QuickBooks, clicking on the “Previous” button on the form will navigate to the transaction immediately preceding the form in date order.  For example, when entering new transactions, previous will navigate to the transaction with the latest transactional date, not necessarily the transaction that was entered immediately prior to clicking on the button if it was not the latest date of all the transactions for that specific type of form.


Procedures – tasks that need to be consistently completed to result in accurate accounting records.


Product – Any of the different QuickBooks software packages: For example, Basic, Premier, etc.


Profit & Loss – 1) The income less expenses resulting in the profitability of a business for a specific time period; 2) This report is also called an Income Statement


Purchase Order – a non-posting transaction used as a record as goods and services are requested from a vendor.


QuickFill – A specific feature in QuickBooks that will permit the software to try to anticipate what is being entered based on the characters already typed.  For example, if when in the account field, the letter “o” is pressed, the software would try to fill in the rest as office supplies if that was the first choice that began with “o” alphabetically.


Receive Payment – a specific tasks completed in QuickBooks to indicate money received from a customer.


Reconciling – this is a specific QuickBooks feature that is done as the bank statement arrives each month.  Through this process, any transactions that have been entered in error, never cleared the bank, etc. are obvious.  Transactions that are in process will display an “*” in the cleared column, transactions that were included on a completed reconciliation, will display a check mark in the cleared column. 


Register – The running total of activity in a Balance Sheet account based on the transactional information that has been entered into QuickBooks to increase or decrease the ending balance for the account.


Release – Minor feature enhancements and programming patches are provided free of charge as releases.  Major improvements are sold as new versions of the software.


Reports – A way of organizing bookkeeping information for the purpose of business decisions or compliance.


Sensitive Accounting Activities – Journal entries, transfer of funds, on-line banking


Sensitive Financial Reporting – Reports like a Balance Sheet or Profit & Loss


Subscription – Some services available from Intuit for QuickBooks require a monthly or annual subscription fee to be paid, others are free.  Examples include the payroll tax tables for Do-It-Yourself Payroll; Online Billing Solutions; etc.


Tab – 1) A specific key on the computer keyboard that is used for moving from field to field on QuickBooks forms; 2) A way of organizing information such as the company “tab” versus the individual user “tab” when customizing preferences or the item “tab” versus the expense “tab” on the bottom of a bill.


T-account – The simplest form of double entry bookkeeping.  Each transaction requires a debit and a credit to keep the books in balance.


Templates – Customizable forms for capturing the data.  Examples include invoices, estimates, purchase orders, statements, etc.


Trace – a term used to indicate following the history of a transaction.  For example, an invoice can be traced to a payment and on to a deposit.


Transactions – Activity can be posting (checks, invoices, etc.) or non-posting (purchase orders, estimates, etc.) with each entry (via form or journal entry) recorded in QuickBooks with a corresponding debit and credit. 


Transaction Type – each different form used to record transactional information is designated as a different type of transaction.  Some examples include invoice, bill payment, deposit, etc.


Trial Balance – A listing by account and balance as of a specific date where the debit and credit totals agree.


Type – 1) A way in QuickBooks to designate one group of similar information from another.  See also Transaction Type, Item Type, and Account Type; 2) the activity of pressing keys on the keyboard to accomplish a specific task (see also data entry).


Undeposited Funds – A special clearing account for grouping payments received from various customers into one bank deposit


Update – another term for converting a file from an older version to a newer one.


User Name – The code that is used in conjunction with a password to access a password protected QuickBooks file.


Version – Software is regularly updated and in the case of QuickBooks this seems to be an annual occurrence.  Major upgrades require purchase and are sold as a new version.  Minor feature enhancements and programming patches are provided free of charge as releases. 


Windows – 1) a method for viewing multiple pieces of information simultaneously in QuickBooks; 2) the operating system developed by Microsoft that is used as the platform for QuickBooks.

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