ACCOUNTING

TERMINOLOGIES
NADHILA YUZRA
RIDHA ASMA NURHUSNA

AKUNTANSI KEUANGAN PUBLIK

 INTRODUCTION

ACCOUNTING ACCOUNTING THE JOB OF

CYCLE TERMS ACCOUNTANT
INTRODUCTION
Accounting is the recording of financial
transactions plus storing, sorting, retrieving,
summarizing, and presenting the
information in various reports and analyses.

Accounting also entails providing a

company's management with the
information it needs to keep the
business financially healthy.
ACCOUNTING CYCLE
 Financial transactions start the process. Transactions can
include the sale or return of a product, the purchase of
Transactions supplies for business activities, or any other financial
activity. For any transaction there always exists some
sort of source documents that verifies that the event
actually happened and was properly authorized and
well documented as well

This step is also known as Journalizing the

transaction. A Firm records all necessary
Journal details regarding the transaction in the
Journals. No matter how complex is the
transaction, there always exist a double entry
aspect of it, that means an event has to be
recorded as debit in one account & credit in
another.
 Collection of an entire group of similar
accounts in double-entry bookkeeping. Also
Ledger
called book of final entry, a ledger records
classified and summarized financial
information from journals (the 'books of
first entry') as debits and credits, and
shows their current balances.

Preparing an unadjusted trial balance is the fourth step in

Trial
Accounting Cycle. This helps in considering the accuracy
Balance
of transactions posted in the ledger accounts. Trial
balance helps in verifying the ledgers substantially,
without guaranteeing hundred percent accuracy in the
ledgers.
 These entries are related to Accruals, deferrals or estimates.
Adjusting entries are made at the end of accounting period.
Making adjusting entries in the Journal is a very significant
ADJUSTING
part of an accounting cycle that helps in complying the
ENTRIES
financial statements with international accounting standards
& principles. By making adjusting entries in its accounting
books, a firm ensures that the revenues and expenses are
related to the appropriate period to which they pertains.

This step in Accounting Cycle incorporates all adjusting

ADJUSTING entries in the Unadjusted trial balance to finally view a trial
TRIAL
BALANCE balance that has all the ledger account balances. All the
debits total must be equal to the credit side total in this
adjusted trial balance.
FINANCIAL
STATEMENT
– Financial statement is summary report that shows
how a firm has used the funds entrusted to it by its
stockholders (shareholders) and lenders, and what is
its current financial position. These are the major
financial reports & statements that a business
prepares:
– Balance Sheet or Statement of Financial Position
– Income Statement or Profit & Loss Account
– Cash Flow statement
– Statement of Changes in Equity
 Closing entries are journal entries made at the end of
the accounting period to close all temporary accounts.
CLOSING The main purpose of passing closing entries is to close
ENTRIES all the temporary accounts specially the Income &
Expenses account, so that all the remaining accounts
with balances can be reflected in the Balance Sheet or
the Statement of Financial position.

After closing entries are made, a business prepares a post

closing trial balance that reflects the balances from all the
CLOSING
TRIAL accounts that appear in Balance Sheet. Since the temporary
BALANCE accounts have already been closed, there is no income &
expense, dividends & withdrawals account’s balances shown
in the post closing trial balance.
ACCOUNTING TERMS
 Accounts receivable (AR)
The amount of money owed by customers or clients to a
business after goods or services have been delivered and/or
used.
 Accounting (ACCG)
A systematic way of recording and
reporting financial transactions for a business or organization.
 Accounts payable (AP)
The amount of money a company owes creditors (suppliers,
etc.) in return for goods and/or services they have delivered.
 Current assets are those that will be converted to cash
within one year. Typically, this could be cash, inventory or
accounts receivable.
 Fixed assets are long-term and will likely provide benefits to
a company for more than one year, such as a real estate,
land or major machinery.
 Balance sheet (BS)
A financial report that summarizes a company's assets (what
it owns), liabilities (what it owes) and owner or shareholder
equity at a given time.
 Capital (CAP)
A financial asset or the value of a financial asset, such as
cash or goods. Working capital is calculated by taking your
current assets subtracted from current liabilities—basically the
money or assets an organization can put to work.
 Cash flow (CF)
The revenue or expense expected to be generated through
business activities (sales, manufacturing, etc.) over a period
of time.
 Cost of goods sold (COGS)
The direct expenses related to producing the goods sold by a
business. The formula for calculating this will depend on what
is being produced, but as an example this may include the
cost of the raw materials (parts) and the amount of
employee labor used in production.
 Credit (CR)
 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.
 Debit (DR)
 An accounting entry where there is either an increase in
assets or a decrease in liabilities on a company's balance
sheet.
 Expenses
The fixed, variable, accrued or day-to-day costs that a
business may incur through its operations.
 General ledger (GL)
 A complete record of the financial transactions over the life
of a company.
 Trial balance
A business document in which all ledgers are compiled into
debit and credit columns in order to ensure a company’s
bookkeeping system is mathematically correct.
 Liabilities (current and long-term) (CL, LTL)
A company's debts or financial obligations 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.
 Net income (NI)
A company's total earnings, also called net profit. Net
income is calculated by subtracting total expenses from total
revenues.
 Profit and loss statement (P&L)
A financial statement that is used to summarize a company’s
performance and financial position by reviewing revenues,
costs and expenses during a specific period of time, such as
quarterly or annually.
 Bonds and coupons (B&C)
A bond is a form of debt investment and is considered a fixed
income security. An investor, whether an individual, company,
municipality or government, loans money to an entity with the
promise of receiving their money back plus interest.
THE JOB OF ACCOUNTANT

Provide Suggest ways to

auditing reduce cost,
Prepare and enhance
examine services for
business and revenues and
financial record improve profits
individual
 THE JOB OF ACCOUNTANT
 Recommends financial actions by analyzing accounting options.
 Summarizes current financial status by collecting information;
preparing balance sheet, profit and loss statement, and other
reports.
 Substantiates financial transactions by auditing documents.
 Maintains accounting controls by preparing and recommending
policies and procedures.
 Guides accounting clerical staff by coordinating activities and
answering questions.
 Prepares special financial reports by collecting, analyzing, and
summarizing account information and trends.
THANKS FOR YOUR ATTENTION

HAVE A NICE DAY