Finance Manual – Concepts

Finance Manual

This is part of the manual for the Android Finance Application.

Concepts

Finance uses the standard terminology used in finance packages such as Microsoft’s Money, or Intuit’s Quicken.

  • Transaction. Records the movement of money between accounts and payees
  • Credit and Debit. A credit is a transaction where an amount is added to an account. Conversely, a debit is a transaction where an amount is taken out of an account.
  • Accounts. These are places where you save or borrow money. Standard accounts could be cheque accounts, savings accounts or credit-card accounts.
  • Payees. These are sources of expenditure or income (i.e. places where you spend or receive money). Common payees could be your grocery store (Wallmart), petrol station (Shell) or your employer (McDonalds). Payees can be accounts and transactions between accounts are usually termed ‘transfers’.
  • Categories. These identify the type of transaction. Whilst not necessary, they can be useful in grouping transactions and identifying budgets
  • Double-entry bookkeeping. This is an accounting mechanism where a transaction is recorded in two places. One account is credited and another account is debited. Finance uses this mechanism as you must specify an account and payee in all transactions.
  • Reconciliation. This is a procedure for verifying the status of the account against an external source. The transactions in the account are, usually, checked against the account statement and marked as being reconciled if they are correct.

 

 

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