Accounting Glossary
A reference for the accounting terms used in DayZero's API and UI.
Chart of Accounts (COA)
The complete list of accounts (called "ledgers" in the API) that a business uses to classify financial activity. Think of it as the filing system for money — every dollar that moves gets filed into one of these accounts.
Account Types
Every account belongs to one of five fundamental types. These come from double-entry bookkeeping:
| Type | What it represents | Examples |
|---|---|---|
| Asset | What the business owns | Cash, bank accounts, accounts receivable, inventory, equipment |
| Liability | What the business owes | Credit cards, loans, accounts payable, unearned revenue |
| Equity | The owner's stake (Assets minus Liabilities) | Owner's equity, retained earnings, owner's draw |
| Revenue | Income earned | Sales revenue, service income, interest income |
| Expense | Costs incurred | Rent, payroll, office supplies, advertising |
The accounting equation: Assets = Liabilities + Equity + (Revenue − Expenses)
Financial Accounts vs Category Accounts
DayZero distinguishes between two kinds of accounts:
- Financial accounts — represent real bank accounts, credit cards, or other financial instruments. These are where transactions live. In the API, they have a
financial_account_type(e.g.bank_account,credit_card). - Category accounts — standard COA entries used for classifying transactions (e.g. "Office Supplies", "Advertising Expense"). They do not have a
financial_account_type.
When you upload transactions, you choose a financial account as the destination. When you categorize a transaction, you assign it to a category account.
Debit & Credit
These are not "good" and "bad." They simply indicate which side of an account is affected:
| Account type | Increased by | Decreased by |
|---|---|---|
| Assets | Debit | Credit |
| Expenses | Debit | Credit |
| Liabilities | Credit | Debit |
| Equity | Credit | Debit |
| Revenue | Credit | Debit |
Every financial event records equal debits and credits — this is the core of double-entry bookkeeping.
Normal balance: the side that increases the account. Asset and expense accounts are "debit-normal"; liability, equity, and revenue accounts are "credit-normal."
Journal Entry
A record of a single financial event. Contains two or more line entries that must balance — total debits must equal total credits. Journal entries are created from many sources: manual entry, invoice finalization, bill receipt, transaction categorization, Stripe webhooks, or Shopify sync.
Line Entry
A single line within a journal entry. Each line targets one account (ledger) and records either a debit or credit for a specific amount (in cents).
Transaction
A bank or card transaction — usually synced automatically from Plaid or uploaded via CSV. Each transaction belongs to a financial account (the source). When categorized, the transaction gets an opposing line entry pointing to a category account.
- Source account: the bank or card the money moved through
- Category: the account the transaction is filed under (expense, revenue, etc.)
- Uncategorized: no category assigned yet
Categorization
The act of assigning a transaction to an account in the chart of accounts. This creates the journal entry that records the transaction in the books. DayZero supports several methods:
| Method | Description |
|---|---|
| Manual | User picks the account |
| AI | AI suggests a category based on the transaction description |
| Bank rules | User-defined rules that auto-categorize based on patterns |
| Similarity | Matches against previously categorized similar transactions |
| Transfer detection | Automatically identifies transfers between the business's own accounts |
Reconciliation
The process of matching your book records against bank statement data to make sure they agree. You can reconcile by uploading a bank statement PDF or using Plaid data. Reconciliation catches missed transactions, duplicates, and errors.
Accounts Receivable (AR)
Money owed to the business by customers. Tracked through invoices. When an invoice is finalized, the system debits Accounts Receivable and credits Revenue. When the customer pays, Cash is debited and AR is credited.
Accounts Payable (AP)
Money the business owes to vendors. Tracked through bills. When a bill is received, the system debits an expense account and credits Accounts Payable. When the bill is paid, AP is debited and Cash is credited.
Accounting Period
A defined date range (typically a calendar month) that can be open, closed, or locked. Closing a period prevents new journal entries from being created within that date range, protecting historical books from accidental changes.
Fixed Assets & Depreciation
Long-lived assets like equipment, vehicles, or buildings that lose value over time. DayZero tracks these and automatically generates depreciation entries — journal entries that reduce the asset's book value by debiting Depreciation Expense and crediting Accumulated Depreciation.
Supported depreciation methods: straight-line, declining balance, double-declining balance, and units of production.
Credit Memo
A document that reduces the amount a customer owes. Typically issued for returns, damaged goods, or billing errors. Can be applied against outstanding invoices.
Revenue Recognition
The rules for when revenue is recorded in the books (per ASC 606). Revenue can be recognized at a single point in time (e.g. product delivered) or over time (e.g. a 12-month subscription recognized monthly).
Budget
Planned spending amounts per account per period. Used for variance analysis — comparing what you planned to spend vs what actually happened. Budgets can be monthly, quarterly, or annual.
Bank Feed
An automatic connection to a bank or card account (via Plaid) that syncs transactions into DayZero. The financial account in DayZero is linked to the external bank account through a source account connection.
Source Account
The Plaid connection that links an external bank account to a financial account in DayZero. When a financial account has a source account, transactions are synced automatically. You can also manually upload transactions to accounts with or without a bank feed.