Glossary
Plain-English definitions of the terms used in these docs, grouped by topic. Each links to the page where it matters most.
Accounting basics
Accrual basis — Recording income when you earn it and expenses when you incur them, whatever the cash timing. The opposite of cash basis.
Asset — Something the business owns: cash, receivables, inventory, equipment. Increases with a debit.
Cash basis — Recording income when you're paid and expenses when you pay. Common for small businesses and some tax filings.
Chart of accounts — The list of every account in your company file, grouped by type. See General Ledger.
Contra account — An account that reduces another on the balance sheet. Accumulated Depreciation reduces Fixed Assets.
Debit / credit — The two sides of every journal entry. Assets and expenses grow with debits; liabilities, equity, and income grow with credits. The side an account grows on is its normal balance.
Equity — The owner's share: assets minus liabilities. Increases with a credit.
General Ledger (GL) — Every journal entry, organized by account. Everything else in the app is built on it. See General Ledger.
Journal entry — A transaction with two or more lines where debits equal credits. Every invoice, bill, and payment is a journal entry underneath.
Liability — Something the business owes: bills, loans, sales tax, payroll tax. Increases with a credit.
Retained Earnings — Equity that holds the net income of past years. The Balance Sheet shows it separately from this year's net income.
Transactions and lists
Accounts Payable (A/P) — What you owe vendors. Grows when you enter a bill, shrinks when you pay it. See Accounts Payable.
Accounts Receivable (A/R) — What customers owe you. Grows when you invoice, shrinks when they pay. See Accounts Receivable.
Amortization — A loan's payment schedule, each payment split into principal and interest. See Loans.
Class, Location, Project — Tags on transaction lines so reports can split the same books by department, site, or job. Classes are in every tier; Locations and Projects need Professional or Accountant. See Dimensions.
Cleared — A transaction you've confirmed against a bank statement during reconciliation.
COGS (cost of goods sold) — What the items you sold cost you. For inventory items it posts automatically on each sale.
Credit Memo — A credit you give a customer, applied to a later invoice or refunded.
Custom Fields — Extra fields you define for records such as contacts and items (Lists → Custom Fields).
Depreciation — Spreading an asset's cost over its useful life. Solid Accounting supports straight-line, declining-balance, and sum-of-years' digits. See Fixed Assets.
Estimate — A proposal that doesn't post to the books until you turn it into an invoice. Status runs draft → sent → accepted or rejected → converted or expired. See Estimates.
FIFO / average cost — Two ways to cost inventory. FIFO uses the oldest purchase cost first; average cost blends every purchase into a running average. See Inventory.
Fixed asset — Equipment, vehicles, and other long-lived property, depreciated over time. See Fixed Assets.
Inventory adjustment — A change to quantity on hand outside a sale or purchase: shrinkage, breakage, count differences.
Items & Services — The list of things you buy and sell: services, inventory items, and non-inventory items. See Items & Services.
Opening balance — An account's starting balance when you begin recording. Set under Company → Opening Balances….
Payment application — The link between a payment and the invoice (or bill) it pays. One payment can pay several invoices, in part or in full.
Purchase Order — An order to a vendor that doesn't post until you receive the goods and enter the bill.
Recurring transaction — A template that creates the same transaction on a schedule; also called a memorized transaction. See Recurring transactions.
Reconciliation — Confirming that your books and the bank statement agree, line by line. See Banking.
Undeposited Funds — A holding account for customer payments you'll deposit together, so one deposit in your books matches one deposit on the bank statement.
Vendor credit — A credit from a vendor (a refund or overcharge) that reduces what you owe them.
Reports and closing
Adjusting entry — A journal entry at period end for accruals, deferrals, depreciation, or corrections.
Balance Sheet — Assets, liabilities, and equity on one date. Assets always equal liabilities plus equity. See Reports.
Budget — Planned amounts per account per period, compared with actuals in variance reports. See Budgets.
Close Year — The action on the Fiscal Years screen that finishes a year: every period in it is locked. No closing entry is posted. An Accountant or Admin can reopen it with a reason. See Fiscal Years & Close Year.
Drilldown — Clicking a number on a report to see the transactions behind it.
Fiscal Year — Your accounting year and its periods, set up under Company → Fiscal Years…. Periods can be locked once they're settled. See Fiscal Years & Close Year.
Income Statement — Income minus expenses for a period; also called profit and loss (P&L). The bottom line is net income. Solid Accounting calls it the Income Statement everywhere. See Reports.
Month-end close — The routine of reconciling, adjusting, and reviewing a month, then locking it. See Month-end close.
Profit & Loss (P&L) — Another name for the Income Statement.
Trial Balance — Every account's balance in a debit or credit column. The two totals must match.
Variance — The difference between actual and budget for an account and period.
Tax
1099 — The US form for payments to contractors. Vendors → 1099 Report totals what you paid each vendor. A vendor's W-9 gives you their tax ID (TIN).
Compound tax — A tax charged on an amount that already includes another tax (for example, some Canadian provincial taxes). See Sales Tax.
Sales tax — Tax you collect from customers for a tax authority; a liability until you pay it. See Sales Tax.
Tax code / tax group — A tax code is one rate for one jurisdiction; a tax group combines several (state + city). Managed under Lists → Tax Codes.
Tax line mapping — Which line of the business tax return (Form 1120-S, 1065, 1120 or Schedule C) each account reports on. See Tax-ready books.
Tax Trial Balance — The books by tax return line, with tax-only adjustments and Schedules L, M-1 and M-2. See Tax-ready books.
TXF — The file format tax software imports; Solid Accounting exports it. See TXF format.
Company file, security, and backup
Audit Trail — The permanent record of who changed what and when in your company file (Company → Audit Trail). See Audit Trail.
Cloud Backup — Solid Accounting's encrypted backup, in Settings → Backup & Restore. It can go to managed storage (included with Updates & Cloud Services), a folder you choose, or your own S3 bucket, and a copy is always kept on this computer. See Cloud Backup.
Company file — The single file that holds your books: transactions, lists, attachments, settings, and users. It stays on your computer and is encrypted with your password.
Encryption — Your company file is encrypted at rest (SQLCipher). Cloud backups are encrypted on your computer (AES-256-GCM) before upload; the key is protected by your password (Argon2id) and your recovery phrase.
Recovery phrase — Words you write down when you set up encryption (Settings → Recovery Phrase) or Cloud Backup (12 words; 24 for backups set up before version 26.10). With it you can open your backups on a new computer or reset a forgotten Admin password. Keep it on paper, somewhere safe.
Retention — How many backups are kept. Cloud Backup keeps 7 daily, 4 weekly, 12 monthly and 5 yearly backups. The automatic copies in your backup places keep every backup for 7 days, one a week for 30 days, and one a month for 180 days. See Cloud Backup.
Working with others
Accountant's Copy — An encrypted copy of your company file for your CPA, whose adjustments you bring back while you keep working. Every license can send one; your accountant needs the Accountant tier to work in it. Related: the Year-End Package and Accountant's Workbook hand your accountant the year's reports. See Accountant's Copy.
AI assistant — Your own assistant (Claude, ChatGPT, Gemini) connected to your company file. On-device AI is coming soon. Corrections it makes change the original transaction, after you approve them. See AI assistants.
Apps — The sidebar screen where you connect other services (processors, shops, payroll). See Apps & integrations.
Client Management — The Accountant tier's list of client company files, opened from one place. Consolidation (Professional and up) combines several company files into one set of balances. See Client Management & Consolidation.
Host Mode — Network sharing (Professional and Accountant): one computer shares its company file with other computers on the network (Settings → Multi-user → Share on the network), which connect with Connect to a company on another computer and a one-time pairing code. See Setting up multi-user.
Review Queue — Where transactions from connected apps and API keys set to review first wait for your approval before they post. See Review Queue & Review Notes.
Roles — What a user can do: Admin, Bookkeeper, Read Only, or Accountant. Set under Company → Users & Roles….
User — A person who signs in to the company file. Standard includes up to 3 users, Professional up to 5, Accountant up to 10; add more at $100 each.
Buying and licensing
License key — The key that identifies your purchase, in the form SA-XXXX-XXXX-XXXX-XXXX. You can also activate by signing in to your account. See License keys.
One-time purchase — You buy Solid Accounting once and keep using the version you bought. No subscription is required to keep working.
Tiers — Standard, Professional, and Accountant. Each adds features and users. See Pricing.
Updates & Cloud Services — Optional, yearly. The first year is included with your purchase. It covers new releases, bank feeds, managed cloud backup, and Cloud Invoicing. If it lapses, you keep using the version you have. See Renewing Updates & Cloud Services.
Related: General Ledger · Modules overview · FAQ