accounts Something to which transactions are assigned. Accounts in MYOB are in one of eight categories:
Accounts are classified as header or detail. Transactions are assigned directly to detail accounts. Header accounts are used to summarise multiple detail accounts. Each MYOB account must have a unique number.
account number The account number is what identifies an account. Each MYOB account must have a unique number.
accounting period A part of your financial year. MYOB treats each calendar month as a separate accounting period. Additionally, MYOB provides an optional 13th period for year-end adjustments.
accounts list Commonly referred to as a chart of accounts, this is a list of all your asset, liability, equity, income, cost of sales, expense, other income, and other expense accounts.
accounts payable What you owe someone else for goods or services delivered. The sum of all accounts payable is recorded as a liability account. Any time you record a purchase in the Purchases command centre, the unpaid balance of the purchase is added to your accounts payable. Every time you pay a bill (using Pay Bills in the Purchases command centre), the amount is subtracted from your accounts payable balance.
accounts receivable What your customers owe you. Any time you record a sale in the Sales command centre, the unpaid balance of the sale is added to your accounts receivable balance. Every time you enter a customer payment (using the Sales command centre), the amount is subtracted from your accounts receivable balance.
accrual method (basis) This is a method of accounting which records sales and purchases at the time they are delivered, not at the time they are paid for.
accrued expenses These are expenses for goods or services received but not yet paid.
activity A task or service provided by your business for which you can track costs and bill customers using time billing invoices
aging: payables The number of days between receiving a bill from a supplier and an aging date (usually today).
aging: receivables The number of days between invoicing a customer and an aging date (usually today).
allocation accounts In MYOB when writing a cheque or recording a payment, the allocation accounts are the expense, income, etc. accounts that balance the transaction.
assets Assets are things you own. Your bank account is an asset. So is your computer. If someone owes you money, the total owed to you is an asset. Current Assets are assets that can be turned into cash within a relatively short period of time (less than a year). Things that take longer to turn into cash, like your factory building, are called Fixed Assets. Assets normally have a debit balance.
audit trail A list of the transactions that make up the balance of an account or accounts.
bad debt Money owed to you that is unlikely to be paid. Many businesses create a contra-asset account to approximate the value of their bad debt. That way, they have a clearer picture of the actual value of their assets.
balance The sum of all the money added to and subtracted from an account.
balance sheet The balance sheet is a financial snapshot of a company's position at a particular time. A balance sheet lists the company's asset, liability and equity accounts. It is called a balance sheet because the total value of the asset accounts minus the total value of the liability accounts always equals the total of the equity accounts.
bill The record of a supplier's invoice
budgets Expected monthly net activity for an account. Budgets are useful for planning for the future and for analysing actual performance against planned performance.
cash drawer Where the money is kept between leaving the customers' hands and being deposited in the bank. Many businesses set up their cash drawer as a bank account.
cash flow The net flow of money in minus money out over a selected date range.
cash method (basis) The opposite of the accrual method of accounting. The cash method records the sale and purchase of goods and services at the time they are paid for, not when they are delivered.
category A category is an entity for grouping transactions. For example, a category can be a department, profit centre, geographic division or any other subset of your business that requires separate reporting.
cleared A withdrawal or deposit is cleared when your bank adjusts your account balance for it.
closed period An accounting period in which all entries are completed. MYOB does not require that you actively close a period. However, in the Preferences window you can prevent accidental posting to a closed (locked) period.
closed purchases Purchases that have been paid in full.
closed sales Sales that have been paid in full.
company information Found in MYOB's Setup menu, your company information contains your company's name, address, tax information and information about your company's financial year.
contra account This is an account that normally carries the opposite balance of the accounts of the same type. Assets for example, normally have a debit balance; a common contra-asset account is the accrued depreciation of an asset.
By using a contra account, you can show a a car company that's worth $12,000, by listing the asset at its $15,000 purchase price followed by the -$3,000 balance of the accrued depreciation account.
conversion month The conversion month is the earliest month in the financial year for which transactions are to be recorded. For example, suppose you purchase MYOB software in October but want to record transactions dated from 1 GLOSSARY 224 September. In this case, your conversion month is September. The conversion month determines the opening balances you will enter when you set up your company file.
cost item The cost of an inventory item. MYOB uses average cost. That is, the total cost of all your purchases for a particular item currently on hand divided by the number of items on hand.
cost of sales Sometimes called "cost of goods sold" this account type works just like an expense account. The only difference is where it appears on the profit & loss statement. Cost of sales accounts appear after your income accounts, but before your expense accounts. Cost of sales is subtracted from your income to produce gross profit. Your expenses are subtracted from your gross profit to produce net profit. In MYOB, you are not required to use Cost of sales accounts.
credit amount Appears on the right side of the ledger (a debit amount occupies the left side). A credit amount increases the balance of accounts with a credit balance and decreases the balance of accounts with a debit balance. Accounts that normally carry a credit balance are liability, equity and income accounts.
credit invoice A credit invoice is a sale with a negative balance due. Usually caused by a return or adjustment, a credit invoice is settled by writing a refund cheque or applying the amount to another open invoice.
credit terms Terms are the agreed upon rules governing the number of days between delivery and payment discounts for early payment and penalties. In MYOB, you can set default terms for all customers.
creditors A creditor is someone to whom you owe money. See also 'accounts payable' on page 222.
current assets Assets that can be turned into cash within a relatively short time (less than a year are called current assets. Some of your current assets are your bank accounts, accounts receivable and petty cash. Current assets usually do not lose their value over time. Current assets normally have a debit balance.
current liabilities Liabilities that become payable within the next year are called current liabilities. When recording a liability that is to be paid over a long period, many accountants split it into two liabilities. The part that is to be paid off within the next year is entered as a current liability; the remaining is entered as a long-term liability.
current year earnings Current year earnings is an equity account. Its balance equals your income minus cost of sales and expenses. Current year earnings are zero at the beginning of a financial year. Current year earnings are kept as a running total as the financial year progresses. When you start a new financial year, current year earnings are reset to zero by moving its balance into the account called Retained Earnings
customer Someone to whom you sell goods or services. In MYOB you must enter a customer card before you record a sale
debit amount Appears on the left side of the ledger (the credit amount occupies the right side); a debit amount increases the balance of accounts with a debit balance and decreases the balance of accounts with a credit balance. Accounts that normally carry a debit balance are asset and expense accounts.
debit purchase A debit purchase is a purchase with a negative balance due. Usually caused by a return or adjustment, a debit purchase is settled by recording a supplier's refund cheque or by applying the amount to another open bill.
debtor A debtor is someone who owes you money. See also 'accounts receivable' on page 222.
department Department is for you to determine which team or section your employee's are placed in the company.
deposits from customers Advances received for goods or services not yet delivered. Customer deposits are kept in a liability account.
deposits to suppliers Advances paid to suppliers for goods or services not yet delivered.
depreciation The expense allocation of the cost of an asset over a period of time. Most accountants create a contra-asset account to track the depreciation of an asset. See Contra Account. A typical depreciation transaction credits the contra asset account and debits a depreciation expense account. Depreciation is most often recorded as a general journal entry.
detail accounts MYOB accounts to which transactions can be assigned.
discount early payment The amount taken off the balance due in return for payment within an agreed number of days.
discount volume purchase se The amount taken off an item's cost because of a special supplier or customer arrangement.
discount days Discount days are the number of days from a sale or purchase within which full payment of the balance due sentitles the payee to a discount.
double-entry accounting A method of bookkeeping in which every entry is balanced by another entry. Correct double-entry accounting always provides a balanced set of books; that is, the total value of your asset accounts minus the total of your liability accounts will equal the total of your equity accounts.
earnings Income minus cost of sales and expenses. See Current Year Earnings.
entitlements Hours that accumulate on paycheques; used to pay special wages, such as holiday or sick pay.
equity This is a company's net worth. The equity of a company equals its assets minus its liabilities. Equity is an account type in MYOB. Equity accounts usually carry a credit balance. Some common equity accounts are current year earnings, retained earnings and shareholder's equity.
expense A cost associated with running a business. Expense is an account type in MYOB. Expense accounts usually carry a debit balance.
finance charge The amount added to an outstanding balance as a penalty for late payment.
financial statements The balance sheet and income (profit & loss) statement. The balance sheet is your company's financial picture at a particular time. The income statement shows your company's financial performance over a period of time.
financial year The 12-month period you use to define your accounting year. MYOB does not require that it match the calendar year. MYOB also provides an optional 13th period for making year-end adjustments that you do not want to affect a particular month.
fiscal year See 'financial year' above.
fixed assets Fixed assets are assets that have a relatively long life. Your buildings, cars and computers are fixed assets. Fixed assets are usually depreciated; that is, they lose some of their value as you use them.
general journal A journal used to record miscellaneous transactions not entered in other journals. For example, year-end adjustments and depreciation expense.
general ledger This is where all your account information-sales, purchases, inventory, cash in, cash out-come together. You draw your financial statements (balance sheet and income statement) from the general ledger
gross profit Gross profit is your income minus cost of sales
header account A header account in MYOB is used to group similar detail accounts. You cannot post a transaction to a header account.
historical balance The balance of an account prior to converting your records to MYOB. You are not required to enter historical balances in MYOB. Enter them only if you wish to compare a current month's activity to the activity for the same month last year.
identifiers A one-letter code used to sort and select cards in the card file. You can assign up to 26 identifiers to a card.
income Revenue from the sale of goods or services. Income is an account type in MYOB. Income accounts usually carry a credit balance.
income statement Also called a profit & loss statement, the income statement shows your company's performance over a period of time.
An income statement begins with income. It then subtracts cost of sales to produce gross profit. Expenses are subtracted from gross profit to produce operating profit. "Other income" accounts are added to operating profit and "other expense" accounts are subtracted from operating profit to produce net profit.
inventory Physical items kept for possible sale to a customer. Most accountants record an inventory's value in a current asset account.
invoice The written record of a sale.
item m A unit in your items list. An item can be physical inventory, like a widget or a pair of shoes, or it can be non-physical, like an hour of your time.
job A job is work for which you wish to track income and expenses. In MYOB, a job can be a profit centre, a product line, a project or any other subset of your business that requires a separate income statement.
journal A journal is a tool for organising your accounting entries. MYOB groups all entries into one of six journals: general, disbursements, receipts, sales, purchases or inventory
liability Liabilities are things you owe. Your working capital loan is a liability. Your accounts payable, what you owe someone for a purchase, is also a liability. Liabilities that are due within the next year are called current liabilities. When a liability is not due for more than a year, it is called a long-term liability. Liabilities normally have a credit balance
linked account Linked accounts are what MYOB uses to post your inventory, payroll, sales and purchase transactions to the proper account. For example, when you link your receivables account, you are telling MYOB which account to post the balance due from a sale.
long-term liability Something you owe that does not have to be paid for at least a year.
miscellaneous purchases Miscellaneous purchases are used in MYOB to record non-item purchases that do not require a printed purchase order
miscellaneous sales Used in MYOB to record non-items sales that do not require a printed invoice.
net income Net income (net profit or loss) is the total of all income accounts minus the sum of your expense and cost of sales accounts.
net profit The total of all income accounts minus the sum of your expense and cost of sales accounts. Also called "net income"
open bill A purchase with an outstanding balance due.
open sale A sale with an outstanding balance due
opening balance The balance of an account as at the start of the first day of your conversion month.
operating profit This is your profit before considering Other Income and Other Expense.
other expenses An MYOB account type used to record expenses that are not directly related to your company's operations. Use other expense accounts to record expenses that are outside the normal operation of your business such as loan interest, fines, etc. Other expense accounts usually have a debit balance
other income An MYOB account type used to record income that is not directly related to your company's operations. Use other income accounts to record income that is outside the normal operation of your business such as interest income. Other income accounts usually have a credit balance.
out of balance When the total credit amount does not equal the total debit amount in a transaction, it is out of balance. MYOB does not allow you to record an out of balance transaction.
paid-up capital The amount of money paid by shareholders in excess of the par value of the shares.
payables What you owe someone else for items or services delivered. See 'accounts payable' on page 222.
pay period The duration selected to process your employee pays.
payroll year The 12-month period you use to define your payroll year. MYOB requires the payroll year to start on January and ends in December. The payroll year that you create will not affect your financial year.
position Position is your employee's job in the company
profit & loss statement See 'income statement' on page 226.
profit centre A subset of your business for which you want to track income and expenses. MYOB calls profit centres "jobs".
purging The act of erasing old data. MYOB allows you to purge journal entries, closed sales, closed purchases and contact logs.
recap transaction An MYOB function that lets you look at a journal entry before it is recorded. Recap transaction is particularly useful for those transactions, such as invoices and bills, for which the journal entry is not immediately obvious.
receivables What someone else owes you for items or services delivered. See 'accounts receivable' on page 222.
reconciling The process of checking that your records agree with your bank's records.
recurring transaction An accounting entry that is made periodically, such as weekly payroll, monthly rent, etc.
retained earnings Money from previous years' earnings that has been left in the company. At the end of a financial year any money earned (or lost) during the financial year is transferred to retained earnings. Retained earnings are recorded in an equity account.
revenue Income from the sale of goods or services. Revenue is recorded in an income account in MYOB. Income accounts usually carry a credit balance.
reversing The process of cancelling a transaction by entering a new transaction with the same amounts but with opposite signs.
shareholder's equity The owners' stake in the company. It is the amount the owners invested in the company plus the current year earnings and retained earnings.
settle a credit invoice When a customer returns something, and you record an invoice that has a negative balance due, it is called a credit invoice. Paying off this negative amount is called settling a credit invoice.
settle a debit purchase When you return something to a supplier, and you record a purchase with a negative balance due, it is called a debit purchase. Paying off this negative amount is called settling a debit purchase.
standard pay The current values of an employee's payroll details (wages, entitlements, deductions, employer expense and taxes) that are automatically used when processing the employee's pay
sub-tax The tax codes that make up a Consolidated tax type.
supplier Someone from whom you buy goods or services. In MYOB you must enter a supplier card before you can record a purchase. See also 'accounts payable' on page 222.
terms Terms are the agreed upon rules governing the number of days between delivery and payment, discounts for early payment and penalties for late payment.
transaction An entry in MYOB that affects the balance of accounts.
trial balance This is a report showing all the activity for an account or accounts within a selected date range. It shows the balance of the account at the beginning of the date range, the activity within the date range, and the balance at the end of the date range. A trial balance is useful for checking your entries prior to doing your period-end processing.