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Terms you need to know
By Christine
Selvig • Bankrate.com
 Accounting
and bookkeeping have languages all their own. Here are a few terms
you'll need to know when you're looking to outsource your accounting
and bookkeeping.
- Coding is the process of identifying
each financial transaction by category.
- Engagement letters spell out the
services the firm will be providing and the costs for those services.
These letters generally include what your costs will be for additional
services.
- A general ledger is a detailed list
of each check issued during the month
- A balance sheet provides you with
a financial picture of your business at a given moment in time.
- A profit and loss statement categorizes
your company's income and expenses.
- Annual compilation reports are prepared
from information supplied by your company.
- An intermediate issue review takes
the annual compilation report a step further. While the report
is built on financial statements supplied by a company, accountants
preparing these reports do raise questions, seek documentation
and provide the company with some financial analysis.
- Full audit: Accountants verify assets
and send out information confirmation requests to third parties
to verify the information in the audit. Audits also include analysis
of the information presented along with suggestions for possible
procedural changes.
-- Posted: Dec. 13, 1999
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