Inventory – A current asset whose ending balance should report the cost of a merchandiser’s products waiting to be sold. Companies sending invoices may try to have all of them paid by the end of their fiscal year. For example, many school systems have a fiscal year that ends in June. Clients who pay invoices, or bills, will possibly to be able to label those costs as expenses.įiscal Year – An accounting year that ends at any other date than December 31. It has been proven that companies who adopt electronic invoicing over paper systems see an increase in cash flow.Įxpenses – Costs that are matched with revenues on the income statement. All parties will benefit from keeping copies of invoices for bookkeeping purposes.Ĭash Flow – Actual changes in cash as opposed to changes in account revenues and expenses. Any invoices sent and/or paid would be accounted for when adjusting entries.īookkeeping – The recording of a company’s transactions into the accounts contained in the general ledger. Accounts payable is sometimes also referred to as trade payables.Īdjusting Entries – These are journal entries usually dated the last day of the accounting period to bring the balance sheet and income statement up to date on an accrual basis. When invoicing a client, you keep record of it as part of their account.Īccounts Payable – This is a current liability on the account, and will show the amount a company or an individual owes for items or services purchased on credit and for which there was not a promissory note. Take a look at the list of accounting terms, and their definitions as they relate to invoicing, below.Īccount – An account is a record in the general ledger that is used to collect and store similar information. We learnt what is an invoice but there are so many new words surrounding invoicing and the world of accounting, and they can be difficult to keep track of! Don’t worry, we’ve got you covered. Accounting definitions related to invoicing
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