Bookkeeping Terms: Definitions, Records, and Examples
Explore bookkeeping terms related to source documents, invoices, receipts, journals, ledgers, debit and credit entries, posting, accounts receivable, accounts payable, cash records, petty cash, bank reconciliation, payroll, error correction, month-end procedures, record retention, and practical examples.
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Search for bookkeeping definitions and related accounting topics published on Accountant Compass.
Bookkeeping Terms Learning Path
Follow this sequence to understand documents, transaction recording, posting, reconciliation, and review.
Understand Bookkeeping
Learn how bookkeeping captures, classifies, records, and organizes financial transactions.
What Is Bookkeeping? →Study Source Documents
Understand invoices, receipts, purchase orders, credit notes, bank records, and supporting evidence.
Explore Source Documents →Record Transactions
Study journals, ledgers, debit and credit entries, posting, subsidiary records, and balances.
Explore Transaction Recording →Reconcile and Review
Learn bank reconciliation, control accounts, error correction, month-end procedures, and record retention.
Explore Bookkeeping Review →Major Bookkeeping Classifications
Bookkeeping systems and records may be classified by recording method, sequence, and accounting purpose.
Single-Entry Bookkeeping
A simplified system that records limited information, often focused on cash receipts and payments.
Double-Entry Bookkeeping
A system that records equal debit and credit effects for each qualifying transaction.
Books of Original Entry
Journals and similar records where transactions are first recorded in date order.
Books of Final Entry
Ledgers that organize posted transactions by account and accumulate account balances.
Browse Bookkeeping Terms by Category
Use these collections to find related bookkeeping definitions and explanations.
Source Document Terms
Invoices, receipts, purchase orders, statements, credit notes, debit notes, and payment evidence.
Explore Source Document Terms →Sales Bookkeeping Terms
Cash sales, credit sales, sales invoices, sales journals, returns, discounts, and customer balances.
Explore Sales Bookkeeping Terms →Purchase Bookkeeping Terms
Cash purchases, credit purchases, supplier invoices, purchase journals, returns, and supplier balances.
Explore Purchase Bookkeeping Terms →Cash Bookkeeping Terms
Cash receipts, cash payments, petty cash, deposits, withdrawals, cash books, and bank records.
Explore Cash Bookkeeping Terms →Accounts Receivable Terms
Customer accounts, receivable ledgers, aging, collections, write-offs, and control accounts.
Explore Accounts Receivable Terms →Accounts Payable Terms
Supplier accounts, payable ledgers, invoice processing, payment scheduling, and control accounts.
Explore Accounts Payable Terms →Payroll Bookkeeping Terms
Time records, gross pay, deductions, net pay, payroll taxes, benefits, and payroll liabilities.
Explore Payroll Bookkeeping Terms →Reconciliation and Close Terms
Bank reconciliation, account reconciliation, trial balances, corrections, and month-end close.
Explore Reconciliation and Close Terms →Essential Bookkeeping Terms
Start with these commonly used bookkeeping definitions.
Bookkeeping
The process of recording, classifying, and maintaining financial transaction records.
View Definition → BBookkeeper
A person responsible for maintaining transaction records and supporting accounting processes.
View Definition → SSingle-Entry Bookkeeping
A simplified recording method that commonly tracks one side of selected transactions.
View Definition → DDouble-Entry Bookkeeping
A system in which each qualifying transaction has equal debit and credit effects.
View Definition → SSource Document
Original evidence supporting the occurrence and details of a financial transaction.
View Definition → IInvoice
A document requesting payment and describing goods or services supplied.
View Definition → SSales Invoice
An invoice issued to a customer for goods or services sold.
View Definition → PPurchase Invoice
A supplier invoice received for goods or services purchased.
View Definition → RReceipt
Evidence that cash or another form of payment was received or made.
View Definition → PPurchase Order
A document authorizing or requesting the purchase of specified goods or services.
View Definition → CCredit Note
A document reducing an amount previously billed or recorded.
View Definition → DDebit Note
A document used to notify another party of a debit adjustment or claim.
View Definition → BBank Statement
A financial institution’s record of transactions and balances for a bank account.
View Definition → JJournal
A chronological record in which transactions are initially entered.
View Definition → GGeneral Journal
A journal used for transactions not recorded in specialized journals.
View Definition → SSales Journal
A special journal commonly used to record credit sales.
View Definition → PPurchases Journal
A special journal commonly used to record credit purchases.
View Definition → CCash Receipts Journal
A special journal used to record cash inflows.
View Definition → CCash Payments Journal
A special journal used to record cash outflows.
View Definition → GGeneral Ledger
The complete collection of accounts used to classify and summarize transactions.
View Definition → SSubsidiary Ledger
A detailed ledger supporting the balance of a related control account.
View Definition → CControl Account
A general ledger account summarizing balances contained in a subsidiary ledger.
View Definition → AAccounts Receivable Ledger
A subsidiary ledger containing individual customer balances.
View Definition → AAccounts Payable Ledger
A subsidiary ledger containing individual supplier balances.
View Definition → PPosting
The process of transferring journal information to ledger accounts.
View Definition → RReference Number
An identifier used to connect documents, journal entries, and ledger postings.
View Definition → AAccount Balance
The net amount in an account after considering debit and credit entries.
View Definition → TTrial Balance
A list of ledger balances used to compare total debits and credits.
View Definition → CCash Book
A bookkeeping record used to capture cash and bank transactions.
View Definition → PPetty Cash
A small cash fund used for minor business expenditures.
View Definition → IImprest System
A petty cash system that restores the fund to a predetermined amount.
View Definition → BBank Reconciliation
A comparison of accounting cash records with the bank statement to explain differences.
View Definition → OOutstanding Check
A recorded check or payment that has not yet cleared the bank.
View Definition → DDeposit in Transit
A deposit recorded by the business but not yet reflected by the bank.
View Definition → BBank Charge
A fee deducted by a financial institution and recorded by the business.
View Definition → RReconciliation
The process of comparing records, identifying differences, and resolving discrepancies.
View Definition → AAging Schedule
A report grouping receivables or payables by the length of time outstanding.
View Definition → CChart of Accounts
An organized list of accounts used by an entity’s accounting system.
View Definition → AAccount Code
A numeric or alphanumeric identifier assigned to an account.
View Definition → TTransaction
An economic event that affects the entity’s financial records.
View Definition → DDebit
An entry recorded on the left side of an account.
View Definition → CCredit
An entry recorded on the right side of an account.
View Definition → NNarration
A brief explanation describing the purpose or nature of a journal entry.
View Definition → VVoucher
A document or record authorizing, supporting, or summarizing a transaction.
View Definition → PPayment Voucher
A document supporting and authorizing a cash or bank payment.
View Definition → RReceipt Voucher
A document supporting and recording money received.
View Definition → CContra Entry
An entry involving transfers between cash and bank accounts within the entity.
View Definition → EError of Omission
A bookkeeping error caused by failing to record a transaction.
View Definition → EError of Commission
A bookkeeping error caused by recording an amount in the wrong account or record.
View Definition → TTransposition Error
An error caused by reversing digits within an amount.
View Definition → SSuspense Account
A temporary account used while an unresolved difference or classification is investigated.
View Definition → CCorrection Entry
An entry made to correct an error in the accounting records.
View Definition → MMonth-End Close
Procedures performed to complete, review, and finalize records for a monthly period.
View Definition → BBookkeeping Cycle
The recurring process of collecting documents, recording transactions, posting, reconciling, and reviewing.
View Definition → AAudit Trail
A traceable path connecting source documents, entries, postings, balances, and reports.
View Definition → RRecord Retention
The controlled preservation of accounting records for operational, legal, and tax purposes.
View Definition →Connect Every Bookkeeping Term to a Complete Record Trail
Bookkeeping definitions become more useful when connected to source documents, transaction dates, account codes, debit and credit entries, journal references, ledger postings, reconciliations, supporting schedules, corrections, approvals, and record retention.
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Frequently Asked Questions About Bookkeeping Terms
What is bookkeeping?
Bookkeeping is the process of collecting, recording, classifying, posting, reconciling, and maintaining financial transaction records.
What is the difference between bookkeeping and accounting?
Bookkeeping focuses mainly on maintaining transaction records and supporting schedules. Accounting also includes adjustment, interpretation, reporting, analysis, and the application of accounting standards.
What are source documents?
Source documents are the original records supporting transactions, including invoices, receipts, purchase orders, bank records, credit notes, and payment evidence.
What is the difference between a journal and a ledger?
A journal records transactions chronologically. A ledger organizes posted transactions by account and accumulates each account’s balance.
Why is reconciliation important in bookkeeping?
Reconciliation compares independent records, identifies timing differences and errors, and helps confirm that account balances are complete and accurate.
Continue to Journal Entry Terms
After learning the documents, records, and reconciliation process used in bookkeeping, continue with Journal Entry Terms to study entry formats, simple and compound entries, adjusting entries, closing entries, reversing entries, and transaction analysis.
Continue to Journal Entry Terms