Accounting Words - C Terms

Capital: The owner's or owners' rights to assets of a business.

Cash basis: An accounting method where transactions are recorded when the actual change of payment occurs, regardless of when the goods or services are delivered.

Cash equivalents: Highly liquid short-term investments.  Examples include money-market funds and treasury bills.

Certified Financial Statements: Financial statements that have been audited and certified by a CPA.

Chart of accounts: A numerical listing of a business’s accounts.

Closing Entries: Journal entries made at the end of the period to return the balance in all accounts to zero and ready the account for the next reporting period..

Contra account: An account that follows another account and has a balance opposite of it.  For example accumulated depreciation is a contra asset account; it would have a credit balance and be subtracted from the asset's debit balance to obtain the book value or carrying amount of the asset.

Credit: An entry on the right side of an account - decreases assets or increases liabilities.