# Glossary

**Accrual accounting**  
A method of accounting where income and expenses are recorded when they're earned or incurred, not when cash actually changes hands. The alternative is cash basis accounting.

[**Balance Sheet**](/reports/balance-sheet.md)  
A financial report showing what your business owns (assets), what it owes (liabilities), and what's left over (equity) at a specific point in time.

**Cash basis accounting**  
A method of accounting where income and expenses are recorded when cash is actually received or paid. Simpler than accrual, and common for small businesses.

[**Categorization**](/common-workflows/categorization.md)  
The process of labeling a transaction with a category - like *Meals & Entertainment* or *Software* - so it appears in the right place on your reports.

**Chart of Accounts (CoA)**  
A structured list of all the accounts used to record transactions in your books. Your accountant manages this - most business owners don't need to interact with it directly.

**Class**  
A way to segment transactions by department, location, project, or product line for more granular reporting. Available on the Plus plan.

**Counterparty**  
The vendor or customer on the other side of a transaction - who you paid or who paid you.

**Entity**  
A single business within your Kick workspace. If you own multiple businesses, each one is a separate entity.

**General Ledger (GL)**  
The complete record of all financial transactions in your business, organized by account. The underlying source of truth for all your reports.

[**Lock**](/working-with-your-team/locks.md)  
A setting that prevents changes to a closed period. Your accountant typically locks periods after they've reviewed and finalized the books.

**Memo**  
A free-text note attached to a transaction for context - useful for explaining what a charge was for.

**Personal entity**  
A special entity in Kick for connecting personal bank accounts and credit cards. Transactions here don't post to your business books until you move them across.

[**Profit & Loss (P\&L)**](/reports/profit-and-loss.md)  
A financial report showing your income, expenses, and net profit or loss over a period. Also called an income statement.

[**Reconciliation**](/common-workflows/reconciliation.md)  
The process of matching your transactions in Kick against your official bank statements to confirm everything is accurate. Your accountant typically handles this.

[**Rule**](/common-workflows/rules.md)  
An automated instruction that tells Kick how to handle specific transactions - for example, always categorizing Amazon transactions as *Supplies & Equipment*.

[**Split**](/common-workflows/splits.md)  
Dividing a single transaction into multiple line items, each with its own category, entity, or class assignment.

[**Task**](/working-with-your-team/tasks.md)  
A communication tool in Kick that lets your accountant or team assign you requests, questions, or action items tied directly to specific transactions.

[**Transfer**](/common-workflows/transfers.md)  
Money moving between two accounts you own - like a bank-to-bank transfer or a credit card payment. Both sides need to be matched in Kick so the movement doesn't inflate your income or expenses.

**Workspace**  
Your Kick account environment - the single place that contains all your entities, transactions, reports, and settings.