Company Level Controls Controls that exist at the company level that have an impact on controls at the process, transaction, or application level. For example, you may hear the terms 'revenues' and 'receipts' used interchangeably in casual office conversation. Cost of Goods Sold This is the purchase cost of the merchandise that was subsequently sold to customers. Shareholders Are the people or business that have invested in the company. Subsidiary Accounts - Accounts that are under a control account; they must equal the main account balance.
Accounting - Accounting keeps track of the financial records of a business. This usually comes up when there are foreign currency transactions to be dealt with. Capitalized Expense - Accumulated expenses that are expensed over time. Income Statement - An accounting of sales, expenses, and net profit for a given period. If you want to start a business, get better at running your business, or get an accounting job, you need to know some essential financial accounting terms and concepts. Analysts, managers, business owners and accountants use this information to determine what their products should cost.
N net After making deductions. Discounted Cash Flow Present value of future cash estimated to be generated. Capital gains have historically been taxed at a lower rate than ordinary income. When the client pays the invoice, the accountant credits accounts receivables and debits cash. It also includes all net sales, exchange of assets; interest and any other increase in owner's equity and is calculated before any expenses are subtracted. A document that details the sale or purchase of stock, parts or services.
Financial Statement - Financial Statements detail the financial activities of a business. Balance Sheet - Provides a snapshot of a business' assets, liabilities, and equity on a given date. Liability - Liabilities are the obligations of an entity, usually financial in nature. Whatever your circumstance, this VentureLine accounting glossary provides the definitions and examples you need for you to know about all aspects of financial record keeping and reporting. Accounts Receivable could be a master account for various individual receivable accounts. Contingency An event that might happen but that is not likely or planned.
The company keeps the accounts in order by classification. Acquisition One company taking over controlling interest in another company. Distribution Expense Expense of selling, advertising, and delivery of goods and services. The gains occur when the business has to pay less to the supplier than the original conversion; The losses occur when the business has to pay more to the supplier than the original conversion. Revenue The amount of money that a business receives in any period and is shown at the top of the profit and loss account report. Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit. Economics The study of the ways goods and services are produced, transported, sold, and used.
An example is an insurance policy purchased for a year for £100 but only £30 relates to this financial year the remaining balance of £70 is transferred to prepayment account. Other Income - Non-recurring income, e. Basic Accounting Terms list is very important to understand before start learning to account. Trial Balance An accounting report which lists all the debits and credits of all the general ledger accounts. On the other hand, if the company sells the land for Rs.
Single Entry Transactions are only recorded once in the ledger. The financial statements that summarize a large company's operations, financial position and over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period. The process of matching one set of figures or documents with another set of figures or documents. Audit Trail - Allow financial transactions to be traced to their source. Capital Stock - Total amount of common and preferred stock issued by a company. V value to the business An idea used in deciding on a measure of current value.
Our list incorporates the most popular terms with a brief description of each one. The last thing you want to do is spend hours re-entering all the transactions for the previous months and re-do the bank reconciliations. It is typically run by an accountant at the year-end to review all the accounts. It will show a list of all the outstanding invoices and how much you owe. Don't feel left out in conversations and don't be left behind because you aren't sure what someone is talking about. Usually they are members of a professional body, membership of which is attained by passing examinations.
A bookkeeping cycle is usually based from the 1st day of the month to the last day of the month, and repeats every month. Shareholders can take money out of the company by dividends. Companies Act The Companies Act 1985 as modified by the Companies Act 1989. Please visit for a list of programs offered. Straight Line Basis A method of depreciation that reduces an asset for the same amount each period. It must also be filed within the timeframe allotted or the refund may be lost.
Absorb indicates that one account or group of accounts combines the amounts from similar or related accounts or groups of accounts. The beta is the covariance of a stock in relation to the rest of the stock market. Raises no new finance but changes the mix of share capital and reserves. On a balance sheet, assets are equal to the sum of liabilities, common stock, preferred stock, and retained earnings. Profit and Loss A financial statement which shows the revenue and expenditure over a period. Loan - A monetary advance from a lender to a borrower.