Accounting & Tax Definitions -- B

Bad Debts: Accounts receivable that are un-collectable Used in Accrual Method accounting.

Balance: Amount arrived at by adding all debits and subtracting all credits. To ensure total debits equal the total credits.

Balance Sheet: Statement, at a particular point in time, of the financial position of a business or organization-divided into three parts: assets, liabilities and ownership (equity). Also known as Statement of Financial Position.

Bank Overdraft: Balance of a bank account when funds withdrawn exceed funds deposited.

Bank Reconciliation: Analysis that accounts for the difference between the balance shown on the bank statement and the balance shown in the accounting records on a given date.

Bankrupt (Bankruptcy) Legal status of a person/corporation who/which is unable to pay its debts as they become due and who/which has made a transfer of property or of a right or interest in property to a trustee for the benefit of creditors. Bankruptcy - state of being bankrupt.

Benefits Received: When people pay taxes according to the amount of government aid (benefits) they receive. Examples of benefits the American public receives include (to name only a few): welfare, child care, Medicare, Medicaid. Some people believe it's only fair that people pay taxes based on the amount of government aid they receive.

Bill of Lading: Written document issued by the carrier of goods. Also, a receipt for goods and a contract to deliver goods.

Bookkeeping: The recording of financial transactions electronically or manually. The record-keeping part of the accounting process.

Book of Original Entry: A journal in which transactions are recorded for the first time before summarizing and/or posting to ledger accounts, for example, purchase journal, cash receipts journal, accounts payable journal, disbursements journal, general journal and payroll journal. See General Journal and Journal.

Book Value: (1) The current value of a fixed asset as shown by the records; the difference between the original cost of the asset and the accumulated depreciation. (2) The difference between the accounts receivable and the allowance for bad debts. (3) The value of a share of stock as shown by the corporate books.

Budget: An estimate of future income and expenditures.

Business Taxes: Generally, businesses pay taxes to federal, state and local governments. Businesses pay taxes on their profits. Businesses also pay unemployment insurance, worker's compensation, social security and Medicare insurance.

Bylaws: Bylaws are the rules and regulations adopted by a corporation for its internal governance. It usually contains provisions relating to shareholders, directors, officers and general corporate business. At the corporation's initial meeting the bylaws are adopted. Bylaws are a private document not filed with any state authority. Bylaws are more flexible than the articles of incorporation because they are easier to amend.