Accrual Method Of Accounting
Accounts for income and expenses in the 12-month period earned or incurred, which is not necessarily when it is received or paid.

Cash Method Of Accounting
Accounts for income and expenses when actually received or paid.

Bad Debt
Money owed for a business debt that cannot be collected

Ledger
A physical collection of related financial information, such as revenues, expenditures, accounts receivable, and accounts payable.

Cash Letter
A group of checks accompanied by a paper listing sent to a clearinghouse, a Federal Reserve Bank, or another institution. A cash letter contains a number of negotiable items, mostly checks, accompanied by a letter that lists the amounts and instructions for transmittal to another bank. May also be called a transmittal letter.

Double-Entry Accounting
A system of accounting that records each business transaction twice.

Blue Book
This is the term commonly used to describe the Government Finance Officers Association publication Governmental Accounting, Auditing and Financial Reporting. Initially, the blue book was the authoritative source for GAAP for state and local governments.

Accounts Payable
Amounts that a business owes

Receipt
A written record of a transaction.

Invoice
A written record of a transaction, often submitted to a customer or client when requesting payment.