Bookkeeping Glossary
Plain-language definitions of Canadian bookkeeping and accounting terms — from HST and CRA to T3010, trust accounting, and reserve funds.
A
- Accounts Payable (AP)
- Money a business owes to its suppliers and vendors for goods or services received but not yet paid. Accurate AP tracking prevents duplicate payments, captures early payment discounts, and ensures cash flow forecasts reflect upcoming obligations.
- Accounts Receivable (AR)
- Money owed to a business by its customers for goods or services delivered but not yet paid. Effective AR management includes timely invoicing, aging reports, and follow-up on overdue accounts to maintain healthy cash flow.
- Accrual Accounting
- An accounting method that records revenues when earned and expenses when incurred, regardless of when cash changes hands. Required for most incorporated businesses in Canada and provides a more accurate picture of financial performance than cash-basis accounting.
B
- Bank Reconciliation
- The process of matching a business's internal accounting records against its bank statements to identify discrepancies, uncleared transactions, and errors. Monthly bank reconciliation is a fundamental internal control that detects fraud and bookkeeping mistakes.
C
- CRA (Canada Revenue Agency)
- The federal government agency responsible for administering tax laws, collecting taxes, and delivering benefit programs in Canada. Businesses must file corporate tax returns, HST returns, and payroll remittances with the CRA on prescribed schedules.CRA-compliant bookkeeping →
- Chart of Accounts
- A structured list of all financial accounts used by a business, organised by category (assets, liabilities, equity, revenue, expenses). A well-designed chart of accounts makes financial reporting clearer and simplifies tax preparation.
- Cash Flow
- The movement of money into and out of a business over a period of time. Positive cash flow means more money is coming in than going out. A business can be profitable on paper but still face cash flow problems if customers pay slowly or expenses are front-loaded.Small business bookkeeping →
F
- Fund Accounting
- An accounting system used by non-profit organisations and charities that tracks resources by designated purpose (general fund, restricted fund, endowment fund). Fund accounting ensures restricted donations are used only for their intended purpose.Non-profit bookkeeping →
H
- HST (Harmonized Sales Tax)
- A combined federal and provincial sales tax collected by businesses in Ontario and other participating provinces. Ontario HST is 13% (5% federal GST + 8% provincial). Businesses with over $30,000 in annual revenue must register for an HST number and remit collected HST to the CRA.Small business bookkeeping →
O
- OHIP (Ontario Health Insurance Plan)
- Ontario's publicly funded health insurance program. Medical clinics must reconcile OHIP billing submissions against payments received from the Ministry of Health, tracking rejected claims, holdbacks, and shadow billing for uninsured services.Medical clinic bookkeeping →
P
- Payroll Remittance
- The process of sending employee source deductions (income tax, CPP, EI) to the CRA on a prescribed schedule. Employers must remit both employee deductions and employer contributions. Late or missed remittances attract penalties and interest.
Q
- QuickBooks Online (QBO)
- A cloud-based accounting software by Intuit widely used by Canadian small businesses. My Book Solutions is a QuickBooks Online Certified ProAdvisor, meaning we are trained and certified to set up, manage, and optimise QBO for your business.
R
- Reserve Fund
- A fund maintained by a condominium corporation to cover major repair and replacement costs for common elements (roofs, elevators, parking structures). Ontario's Condominium Act requires condo corporations to conduct reserve fund studies and maintain adequate reserves.Condo corporation bookkeeping →
S
T
- T3010 (Registered Charity Information Return)
- An annual information return that Canadian registered charities must file with the CRA within six months of their fiscal year-end. It reports revenues, expenditures, assets, and charitable activities. Failure to file can result in revocation of charitable status.Charity bookkeeping services →
- Trust Accounting
- The management of funds held in trust on behalf of clients — a legal requirement for law firms in Ontario under Law Society of Ontario rules. Trust funds must be kept separate from operating funds, with detailed records of all receipts and disbursements.Law firm bookkeeping →
X
- Xero
- A cloud-based accounting platform popular with small businesses and professional practices. My Book Solutions is a Xero Certified Advisor, trained to implement and manage Xero for businesses across Canada.
Y
- Year-End (Fiscal Year-End)
- The last day of a business's 12-month accounting period. At year-end, financial statements are prepared, adjusting entries are made, and corporate tax returns are filed. Incorporated businesses in Canada must file a T2 corporate return within six months of their fiscal year-end.Year-end bookkeeping services →
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