Key Terms
The key terms used in the unit are listed below:
- Accounting Cycle: Generally, accounts are prepared for one year. This is known as the accounting period. During the accounting period, a number of activities take place. These activities are part of the accounting cycle.
- Journalizing: The process of recording business transactions in a journal.
- Invoice: An invoice is a document that provides details about buying or selling materials or goods.
- Receipt: When a customer gives cash, a receipt is used as an acknowledgement for having received payment (this is called a cash receipt). The receipt contains details such as the date, amount paid, name of customer, and the nature of payment.
- Memorandum: A memorandum is prepared when there is no evidence of a source document for a business transaction. In such cases, the memorandum is considered to be the source document for the transaction.