Accountant

A professional responsible for managing and analyzing financial records to ensure accuracy and compliance with laws and regulations. Read more

Accounting

The systematic process of recording, summarizing, and analyzing financial transactions to provide useful information for decision-making. Read more

Accounting Cycle

The steps followed to keep financial records accurate, from recording transactions to preparing financial statements. Read more

Accounting Period

Financial transactions are recorded and reported in a specific time frame (e.g., month, quarter, year). Read more

Accounts Payable

Money a business owes suppliers for goods or services received but not paid for is recorded as a liability. Read more

Accounts Receivable

Money owed to a business by its customers for products or services delivered but not yet paid for is recorded as an asset. Read more

Accrual Accounting

A method where revenue and expenses are recorded when earned or incurred, regardless of when the cash is received or paid. Read more

Accruals

Revenues earned or expenses incurred that have not yet been recorded, ensuring financial statements reflect the true financial position.

Accrued Expenses

Liabilities represent expenses a company has incurred but not yet paid, such as wages or utilities. Read more

Adjusting Entries

Entries made at the end of an accounting period to update the balances of revenues and expenses, ensuring accurate financial reporting. Read more

Amortization

The gradual reduction of a debt or the cost of an intangible asset over a specific period, spreading the expense over its useful life. Read More about Amortization

Annual Report

A comprehensive report on a company’s financial performance over the past year, including financial statements and operational activities. Read more about Annual Report

Appreciation

An increase in the value of an asset over time. Read more about Appreciation

Asset

Anything of value owned by a business, such as cash, inventory, equipment, or property, which can provide future economic benefits. Read more

Audit

An official examination of a company’s financial records and statements to ensure accuracy and compliance with accounting standards and laws. Read more

Bad Debt

An amount owed to a business that is unlikely to be collected is usually written off as a loss. Read more

Bad Debt Expense

The cost incurred when a business does not expect to collect money owed to it by customers is recorded as an expense.

Balance Sheet

A financial statement that shows a company’s assets, liabilities, and shareholders’ equity at a specific point in time. Read more

Bank Reconciliation

The process of comparing a company’s financial records with its bank statement to ensure accuracy and consistency. Read more

Bank feed

A feature in accounting software that automatically imports transactions from a business’s bank account into the system. Read more

Bookkeeping

The process of recording and organizing all financial transactions systematically to ensure accurate accounting.

Bootstrapping

Starting or growing a business using personal finances or operational revenues without external funding. Read more about Bootstrapping

Break-Even Point

The point at which a business’s revenues equal its costs, meaning the business is not making a profit or a loss. Read more

Budget

A financial plan that estimates income and expenses over a specific period, helps businesses allocate resources effectively. Read more

Business Entity

A legally recognized organization, such as a corporation or partnership, that exists separately from its owners. Read more

Capital

Financial resources are used by a business to fund operations, purchase assets, and invest in growth. Read more

Capital Cost

The cost incurred to acquire or improve a long-term asset, such as machinery or buildings, is recorded on the balance sheet and depreciated over time. Read more

Cash Accounting

An accounting method where revenues and expenses are recorded only when cash is received or paid out.

Cash Basis Accounting

A simpler form of accounting that records financial transactions when cash is exchanged, rather than when they occur. Read more

Cash Equivalents

Short-term, highly liquid investments that can be easily converted to cash, such as treasury bills or money market funds. Read More

Cash Flow

The movement of money into and out of a business, is used to assess its liquidity and financial health.

Cash Flow Statement

A financial report that shows a company’s cash inflows and outflows over a specific period, providing insights into its liquidity. Read more

Chart of Accounts

A list of all the accounts used by a company to organize and record financial transactions in its accounting system. Read more

Closing Entries

Entries are made at the end of an accounting period to transfer balances from temporary accounts (like revenue and expenses) to permanent accounts (like equity). Read more about Closing Entries

Cost Accounting

A method of accounting that tracks, records, and analyzes the costs associated with a company’s operations. Read more

Cost of Goods Sold (COGS)

The direct costs associated with producing the goods a company sells, including materials and labour. Read more

Credit Entries

Accounting entries that increase liabilities or equity, or decrease assets or expenses, are recorded on the right side of the ledger. Read more

Creditors

Individuals or businesses to whom a company owes money for goods or services received. Read more

Current Assets

Assets that are expected to be converted into cash or used up within one year, such as cash, inventory, and accounts receivable. Read more

Current Liabilities

Obligations that a business must settle within one year, such as accounts payable, short-term loans, and accrued expenses. Read more

Current Ratio

A financial metric that compares a company’s current assets to its current liabilities, is used to assess its ability to pay short-term obligations. Read more

Debenture

A loan is taken by a company that is not backed by any physical asset, relying on the company’s promise to pay. Read more

Debit Entries

Accounting entries that increase assets or expenses, or decrease liabilities or equity, are recorded on the left side of a ledger. Read more

Debt

Money that a business borrows and must repay, usually with interest, over time. Common forms of debt include loans and bonds. Read more

Deferred Income

Revenue that has been received but not yet earned is recorded as a liability until the service or product is delivered. Read more

Deferred Tax

A tax obligation that is recognized in the financial records but not yet due for payment, often due to timing differences in income recognition. Read more

Depreciation

The process of spreading the cost of a tangible asset over its useful life, allows a business to allocate the expense gradually. Read more

Direct Costs

Expenses directly tied to the production of goods or services, such as raw materials or labour. Read more

Dividends

Payments made by a corporation to its shareholders, usually from profits, as a return on their investment. Read more

Double Entry Accounting

An accounting system where every transaction affects at least two accounts, with one account debited and another credited, ensuring the books stay balanced. Read more

Drawings

Money or assets are taken out of a business by the owner for personal use, reducing the owner’s equity in the company. Read more

Earnings Before Interest and Taxes (EBIT)

A measure of a company’s profitability that looks at earnings before interest and taxes are deducted. Read more about Earnings Before Interest and Taxes (EBIT)

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

A measure of profitability before accounting for interest, taxes, depreciation, and amortization. Read more about EBITDA

Equity

The value of a business after all liabilities have been subtracted from its assets, represents the owner’s stake in the company. Read more

Expense Tracking

Monitoring and recording all business-related costs to maintain budgetary control and financial awareness.

Expenses

Costs incurred in the normal course of business, such as rent, utilities, and salaries, reduce a company’s profit. Read more

Factoring

A financial transaction is where a business sells its accounts receivable to a third party at a discount to receive immediate cash. Read more about Factoring

Financial Accounting

Financial accounting is the process of recording, summarizing, and reporting a company’s financial transactions to provide accurate financial statements. Read more

Financial Records

Documents detailing a business’s financial activities and transactions, providing a comprehensive overview of its financial health. Read more

Fixed Assets

Long-term tangible assets, such as buildings, machinery, and equipment, are used in business operations and are not easily converted to cash. Read more

Fixed Costs

Business expenses that remain constant, regardless of production or sales levels, such as rent and salaries. Read more

General Ledger

The master record of all financial transactions in a business, used to compile financial statements and track account balances. Read more

Goodwill

An intangible asset that represents the value of a business’s reputation, customer relationships, and brand recognition. Read more

Gross Income

The total income a business earns before any deductions, such as expenses or taxes, are applied.

Gross Profit

The difference between a company’s revenue and the cost of goods sold (COGS), shows the profit made from core business operations. Read more

Income Statement

A financial statement that shows a company’s revenue, expenses, and profit or loss over a specific period. Read more

Indirect Costs

Expenses that are not directly linked to production but are necessary for the business to function, such as administrative salaries or rent.

Interest Expense

The cost incurred by a business for borrowing money, such as loans or bonds, is recorded as an expense in the income statement.

Internal Audit

An independent review is conducted within an organization to assess the accuracy of financial records and compliance with policies.

Journal

A detailed record of all financial transactions in chronological order, used for accounting purposes. Read more

Liabilities

Financial obligations a business owes to others, such as loans, accounts payable, and mortgages, representing claims on its assets. Read more

Liquidity

A company’s ability to meet its short-term obligations using its most liquid assets, such as cash or assets that can quickly be converted to cash.

Loan

A sum of money borrowed by a business that must be repaid with interest over a specified period.

Long-Term Liabilities

Obligations that a company must repay after one year, such as long-term loans or bonds.

Net Income

The total profit a business earns after all expenses, taxes, and costs have been deducted from total revenue, also known as net profit or the bottom line.

Net Profit

The amount of money a business earns after all expenses, taxes, and other costs have been deducted from total revenue. It reflects the company’s profitability. Read more

Nominal Ledger

Another term for the general ledger is where all financial transactions of a business are recorded.

Operating Costs

The day-to-day expenses required to run a business, such as rent, utilities, and wages, that are necessary for operations.

Operating Profit

The profit a company makes from its core business operations, excluding interest and taxes, is often referred to as EBIT.

Overdraft

A facility allowing a bank account holder to withdraw more money than is available in the account, up to an agreed limit. Read more

Overheads

Ongoing expenses are not directly tied to production, such as rent, utilities, and administrative costs. Read more

Owner’s Equity

The owner’s claim on the company’s assets after all liabilities have been paid, represents the net worth of the business. Read more about Owner’s Equity

Payroll

The total amount of money a company pays its employees for their work, including wages, salaries, and bonuses.

Petty Cash

A small amount of cash is kept on hand to cover minor or everyday expenses, such as office supplies or small purchases. Read more

Post-Dated Cheques

Cheques written with a future date, cannot be cashed until that date is reached.

Prepaid Expenses

Payments made for goods or services in advance of receiving them, are recorded as assets until the benefits are realized. Read more

Profit

The financial gain made by a business after all expenses have been subtracted from total revenue.

Profit and Loss Statement

Another term for the income statement, which shows a company’s revenues, expenses, and profits or losses over a specific period.

Profit Margin

A financial metric that shows the percentage of revenue that remains as profit after expenses are deducted. Read more about Profit Margin

Profit Reports

Statements showing a company’s earnings after expenses are deducted, are essential for assessing profitability.

Reconciliation

The process of ensuring that two sets of financial records, such as bank statements and internal records, match to ensure accuracy.

Retained Earnings

The portion of a company’s profits that are kept in the business for future growth or to pay down debt, rather than distributed as dividends. Read more about Retained Earnings

Revenue

The total income earned by a business from its core operations, such as selling products or providing services, before any expenses are deducted. Read more

Shareholders’ Equity

The owner’s share of the company, calculated as total assets minus total liabilities, represents the company’s net worth to its shareholders.

Suspense Account

A temporary account is used to record uncertain or unclassified transactions until they can be properly assigned. Read more

Tax Deduction at Source (TDS)

A tax deducted from payments made to an individual or business and paid directly to the government, typically for salaries, commissions, or rent. Read more

Tax Liability

The total amount of taxes a business owes to the government, based on its taxable income or transactions. Read more about Tax Liability

Trial Balance

A report that lists the balances of all ledgers in a business’s accounting system, is used to verify that the sum of debits equals the sum of credits. Read more

Unearned Revenue

Money received by a business for goods or services that have not yet been delivered is recorded as a liability until the delivery is completed.

Unrealized Gain/Loss

The increase or decrease in the value of an investment that has not yet been sold means the gain or loss is not yet realized or finalized. Read more about Unrealized Gain/Loss

Working Capital

The capital available to a business for day-to-day operations, calculated as current assets minus current liabilities, represents short-term financial health. Read more

Write-Off

The process of removing an uncollectible debt or a worthless asset from a company’s books reduces the company’s financial burden. Read more

Yield

The earnings generated from an investment, typically shown as a percentage of the investment’s cost. Read more