diff --git a/accounting/overview/main_concepts/terminologies.rst b/accounting/overview/main_concepts/terminologies.rst index 131670ef7..526803bf8 100644 --- a/accounting/overview/main_concepts/terminologies.rst +++ b/accounting/overview/main_concepts/terminologies.rst @@ -14,79 +14,88 @@ Accounting Terminologies Payment Terms Payment terms describe how and when a customer invoice (or - supplier bill) should be pay over the time. Example: 30% direct - payment, balance in two months. + supplier bill) should be paid over the time. Example: 30% direct + payment, balance due in two months. Bank Reconciliation - Bank reconciliation is the process of matching your payment lines - with existing journal items or creating new journal items on the - fly. + Bank reconciliation is the process of matching transactions from your bank + records with existing journal items or creating new journal items on the + fly. It is a process of verification to ensure that your bank and your + records in Odoo say the same thing. Reconciliation Journal items reconciliation is the process of linking several - journal items together like an invoice and a payment. This allows - to mark invoices as paid. + journal items together like an invoice and a payment. This allows you + to mark invoices as paid. It is also useful when comparing values of + 'goods received not invoiced' and 'goods shipped not billed' accounts. Deposit Ticket Deposit tickets group several payment orders (usually checks) - that are deposited together at the bank. This allows an easy - reconciliation with the bank statement line if the line has one - line per deposit. + that are deposited together at the bank at the same time. This + allows an easy reconciliation with the bank statement line if + the line has one line per deposit. Journal Entry A journal entry is an accounting transaction, usually related to a financial document: invoice, payment, receipt, etc. A journal entry always consists of at least two - lines. The sum of the credits of all journal items of a journal - entry is equal to the sum of their debits. + lines, described here as journal items, which credit or debit + specific accounts. The sum of the credits of all journal items + of a journal entry must be equal to the sum of their debits + for the entry to be valid. Journal Item - A line of a journal entry, with a debit or credit - associated to an account. + A line of a journal entry, with a monetary debit or credit + associated with a specific account. Analytic Accounts Sometimes called **Cost Accounts**, are - accounts that are not part of the chart of account and that - allows to track costs and revenues. Analytic account are usually - structured by projects, departments, etc. Every journal item is - posted in a regular account in the chart of account and can be - posted to an analytic accounting for reporting purposes. + accounts that are not part of the chart of accounts and that + allow you to track costs and revenues. Analytic accounts are usually + grouped by projects, departments, etc. for analysis of a company's + expenditures. Every journal item is posted in a regular account + in the chart of account and can be posted to an analytic account + for the purpose of reporting or analysis. Analytic Entries - Cost or revenues posted to analytic accounts, + Costs or revenues posted to analytic accounts, usually related to journal entries. Sales Receipt A receipt or other slip of paper issued by a store - or other vendor showing where a purchase was made and also the - amount, date, department, etc. Sales receipt are usually used - instead of invoices if the sale is paid in cash in the store. + or other vendor describing the details of a purchase (amount, + date, department, etc.). Sales receipt are usually used + instead of invoices if the sale is paid in cash in a store. Fixed Assets - Property owned by the company. Odoo Asset management is used to manage - the depreciation / amortization of the asset over the time. + Property owned by the company, usually with a useful life greater + than one reporting period. Odoo Asset management is used to manage + the depreciation / amortization of the asset over the time. Typical + examples would be capital equipment, vehicles, and real estate. Deferred Revenues - Are used to recognize revenues of sales of + Are used to recognize revenues for sales of services that are provided over a long period of time. If you - sell a 3 years maintenance contract, you can use the deferred - revenue mechanism to recognize 1/36 of the revenue every month. + sell a 3 year maintenance contract, you can use the deferred + revenue mechanism to recognize 1/36 of the revenue every month + until the contract expires, rather than taking it all initially + or at the end. Fiscal Position Define the taxes that should be applied for a specific customer/vendor or invoice. Example: If some customers - benefit for specific taxes (government, construction companies, + benefit from specific taxes (government, construction companies, EU companies that are VAT subjected,…), you can assign a fiscal position to them and the right tax will be selected according to the products they buy.