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Apr 24, 2024 · What Is On Account? "On account" is an accounting term that denotes partial payment of an amount owed. On account is also used to denote the purchase/sale of goods or services on...
Aug 1, 2023 · From accounting to forecasting and everything in between, our glossary is designed to help you better understand the terms you’ll come across on your journey to building a strong financial future for your business.
- Balance Sheet. The balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific point in time. It presents the company’s assets (what it owns), liabilities (what it owes), and shareholders’ equity (the difference between assets and liabilities).
- Income Statement. The income statement, also known as the profit and loss statement or P&L, summarizes a company’s revenues, expenses, gains, and losses over a specific period.
- Cash Flow Statement. The cash flow statement tracks the inflow and outflow of cash within a company during a specific period. It categorizes cash flows into three main activities: operating, investing, and financing.
- Statement of Retained Earnings. The statement of retained earnings, sometimes called the statement of owner’s equity, shows the changes in a company’s retained earnings over a specific period.
- Accounts Payable. Accounts Payable refers to the money a company owes to its creditors or suppliers for goods and services purchased on credit. It represents a liability on the company's balance sheet until payment.
- Balance Sheet. The Balance Sheet is a financial statement that provides a snapshot of a company's financial position at a specific time. It presents the company's assets, liabilities, and shareholders' equity, enabling stakeholders to assess its financial health.
- Cash Flow. Cash Flow represents the movement of cash into and out of business over a specific period. It provides insights into a company's ability to generate cash and meet its financial obligations.
- Depreciation. Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It reflects the asset's value decrease due to wear and tear, obsolescence, or other factors.
- Accounting period. Every accounting statement will have an accounting period, including balance sheets, income statements, and statements of cash flow.
- Accounts payable (AP) Accounts payable (AP) are funds your business owes others on an invoice that is "payable" by your business. Basically, you will record any invoice your business receives as an AP.
- Accounts receivable (AR) Accounts receivable (AR) are funds that a third party owes your business. Typically, it's the money owed to you for services and goods used or delivered that a customer has not paid for yet.
- Accrued expense. An accrued expense is another form of liability your business has and needs to pay. However, the difference between an accrued expense and AP is that you haven't received an invoice for these costs.
Most small business owners don't have an accounting degree, so we’ve compiled a list of common accounting terms, along with abbreviations, acronyms and definitions.
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Accountancy is the practice of recording and analyzing financial data, while accounting is the process of using that data to make business decisions. Accountants create financial statements, manage assets and liabilities, produce company performance reports, and monitor internal controls.
