Business / Accounting Glossary

Cash Equivalents: Short-term, highly liquid investments that can be converted easily into cash.

Cash Flow: A report which shows the flow of money in and out of the business over a period of time.

Cash Flow Forecast: A report which estimates the cash flow in the future (usually required by a bank before it will lend you money, or take on your account).

Cash In Hand: See Undeposited funds account .

Cash Inflows: Any current or expected revenues or savings directly associated with an investment.

Cash Outflows: The initial cost and other expected outlays associated with an investment.

Cash Over And Short: An account used to record overages and shortages in petty cash.

Cash Receipts Journal: A special journal in which all cash received, from sales, interest, rent, or other sources, is recorded.

Cash-Basis Accounting: A system of accounting in which transactions are recorded and revenues and expenses are recognized only when cash is received or paid.

Cashiers Check: A check issued by a bank, drawn on its own funds and signed by the cashier.

Ceiling: The maximum market amount at which inventory can be carried on the books: equal to net realizable value.

Certificate Of Deposit (CD): A timed deposit that may be protected by the FDIC, incurs penalty charges if money is withdrawn before the maturity date, and usually has a higher rate of return than other interest-bearing . . . View Full Definition

Certified Public Accountant (CPA): A special designation given to an accountant who has passed a national uniform examination and has met other certifying requirements: CPA certificates are issued and monitored by state board . . . View Full Definition

Charge Back: Refers to a credit card order which has been processed and is subsequently cancelled by the cardholder contacting the credit card company directly (rather than through the seller). This resu . . . View Full Definition

Chart Of Accounts: A systematic listing of all accounts used by a company.

Charter (Articles Of Incorporation): A document issued by a state that gives legal status to a corporation and details its specific rights, including the authority to issue a certain maximum number of shares of stock.

Check Register (Ledger): A record of all activity that happens within a checking account: maintained by the checking account holder.

Checking Account: An account from which the account holder can write checks.

Circulating Assets: The opposite to Fixed assets . Circulating assets describe those assets that turn from cash to goods and back again (hence the term circulating). Typically, you buy some raw materials, start . . . View Full Definition

Classified Balance Sheet: A balance sheet in which assets and liabilities are subdivided into current and noncurrent categories.

Closed Transaction: A transaction that is completed within the accounting period: both the purchase and payment or sale and receipt of payment occur within the same accounting period.

Closing Entries: Entries that reduce all nominal, or temporary, accounts to a zero balance at the end of each accounting period, transferring their preclosing balances to a permanent balance sheet account.

Closing The Books: A term used to describe the journal entries necessary to close the sales and expense accounts of a business at year end by posting their balances to the profit and loss account, and ultimate . . . View Full Definition

Code Of Professional Ethics: Rules set by the AICPA's Committee on Professional Ethics, which govern the conduct of CPAs.

Commission: A fee to a third party for assisting a business transaction, such as buying or selling an asset.

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