Bookkeeping runs on a compact vocabulary — a few dozen terms that quietly decide whether a file is right. This A–Z defines the ones that matter, each in a sentence or two you can hold our work to.
A
- Accounts payable
- The money your business owes suppliers and vendors for goods or services received but not yet paid. In QuickBooks it is a liability account that bills post to and payments clear from.
- Accounts receivable
- The money customers owe you for invoices you have sent but they have not yet paid. QuickBooks tracks it as an asset that rises when you invoice and falls when payment arrives.
- Accrual basis
- An accounting method that records income when you earn it and expenses when you incur them, regardless of when cash actually moves. It matches revenue to the period that produced it.
- Audit trail
- QuickBooks' built-in log of every transaction added, changed, or deleted, showing who did it and when. It is the record that lets anyone trace how a number reached its current state.
B
- Balance sheet
- A statement showing what your business owns, owes, and the owner's equity at a single point in time. Assets always equal liabilities plus equity, which is why it must stay in balance.
- Bank feed
- A connection that pulls transactions from your bank or card directly into QuickBooks. It speeds up data entry, but downloaded transactions still need reviewing and matching before they are truly recorded.
- Bank reconciliation
- The monthly check that matches the cash balance in your books to the bank statement, accounting for timing differences, until the two agree exactly. It is the proof that recorded cash is real.
C
- Cash basis
- An accounting method that records income only when money is received and expenses only when they are paid. It is simpler than accrual but can misstate profit in months with large timing gaps.
- Chart of accounts
- The master list of every account your transactions are filed against — assets, liabilities, equity, income, and expenses. It is the backbone that organizes how every dollar is categorized.
- Class tracking
- A QuickBooks feature that tags transactions with a label such as location, department, or program, so you can run profit-and-loss reports segmented by that class without creating separate accounts.
- Cost of goods sold
- The direct cost of the products or services you sold during a period — materials, freight, and direct labor. Subtracted from revenue, it produces your gross profit.
- Credit memo
- A document that reduces what a customer owes you, issued for a return, overcharge, or allowance. In QuickBooks it can be applied to an open invoice or left as an available credit.
D
- Debit and credit
- The two sides of every accounting entry. Each transaction posts equal debits and credits, and keeping that balance is what makes the books mathematically consistent under double-entry accounting.
- Depreciation
- The gradual expensing of a long-lived asset, such as equipment or a vehicle, across the years it is used rather than all at once. It spreads the cost to match the asset's useful life.
E
- Equity
- The owner's remaining stake in the business after subtracting liabilities from assets. It includes contributions, retained earnings, and draws, and represents what would be left if everything were settled.
F
- Fiscal year
- The twelve-month period a business uses for accounting and tax reporting. Many use the calendar year, but QuickBooks lets you set any start month to match your reporting needs.
G
- General ledger
- The master record where every posted transaction lands, organized by account. It is the complete, permanent history the trial balance and financial statements are built from.
I
- Inventory
- The goods a business holds for sale. QuickBooks values it as an asset and moves its cost to cost of goods sold as items are sold, so the tracking must stay accurate.
- Invoice
- A bill you send a customer requesting payment for goods or services. In QuickBooks it creates an accounts-receivable balance that clears when the customer pays.
J
- Journal entry
- A direct posting of debits and credits to accounts, used for adjustments ordinary forms do not cover — depreciation, accruals, or corrections. It is the manual tool behind double-entry accounting.
L
- Liability
- An amount the business owes to others — loans, unpaid bills, credit-card balances, payroll due, or taxes collected. Liabilities appear on the balance sheet opposite the assets they helped fund.
M
- Merchant fees
- The charges a card processor deducts for accepting customer payments. Recorded as an expense, they are easy to miss because the deposit that reaches your bank is already net of the fee.
O
- Opening Balance Equity
- A temporary QuickBooks account that holds balances entered when a file is set up or data is imported. Once every balance is traced to its real account, it should net to zero.
P
- Payroll taxes
- The federal, state, and local taxes tied to wages — amounts withheld from employees plus the employer's share. QuickBooks must track each so filings and payments to the agencies come out right.
- Profit and loss statement
- A report summarizing income and expenses over a period to show whether the business made or lost money. Also called an income statement, it is the main measure of operating performance.
R
- Reconciliation
- The process of matching an account in your books to an outside record, such as a bank or card statement, until the two agree. It confirms nothing is missing, duplicated, or wrong.
- Retained earnings
- The cumulative profit a business has kept rather than distributed, carried forward year to year. QuickBooks rolls net income into it automatically at the close of each fiscal year.
S
- Sales tax
- The tax you collect from customers on taxable sales and owe to the state. It is money held on behalf of the agency, not income, and QuickBooks tracks what you have collected and owe.
T
- Trial balance
- A report listing every account's ending balance, with total debits equal to total credits. It is the first check that the ledger is internally balanced before statements are prepared.
U
- Undeposited Funds
- A holding account where QuickBooks parks received payments until you group them into a deposit that matches your bank. A stale balance there usually means deposits were never properly recorded.
V
- Vendor
- Anyone your business buys from and pays — suppliers, contractors, utilities, or a landlord. QuickBooks tracks bills, payments, and 1099 totals by vendor, so accurate vendor records keep payables and filings correct.
W
- Working papers
- The supporting schedules and documentation behind the numbers in your books — reconciliations, account analyses, and adjustment notes. They are what make a set of books reviewable and defensible.
Want the fuller version of any term above? Open the reference docs, read how we work in our methodology, or start with a free QuickBooks review.