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- In the multifaceted world of accounting, professionals encounter an array of terms that can often be challenging to decipher. Understanding these complex accounting terms is essential for accurate financial analysis, effective decision-making, and compliance with regulatory standards.
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Jul 9, 2024 · How to Use This Guide to Accounting Terms. Presented in alphabetical order, this glossary of accounting terms covers essential basics and key concepts. You can look up individual terms, or read the guide from start to finish for a quick crash course in accounting fundamentals.
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2 days ago · To help remove some of the mystery behind accounting language, this article will provide definitions and explanations for some of the most common Accounting Terms & Phrases. With this guide, you’ll better understand financial statements, reports, and conversations about your finances.
- 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.
In the multifaceted world of accounting, professionals encounter an array of terms that can often be challenging to decipher. Understanding these complex accounting terms is essential for accurate financial analysis, effective decision-making, and compliance with regulatory standards.
- Accounts Receivable
- Allocation
- Asset
- Balance Sheet
- Capital
- Cost of Goods Sold
- Depreciation
- General Ledger
- Gross Income
- Income Statement
Money due to a business for goods and services delivered or used but not yet paid for by clients or customers.
The division and assignment of costs to products, programs, periods, departments or accounts. For example, overhead costs such as rent and utilities are allocated to a company’s operations department.
Anything a company owns that has monetary value. This includes tangible assets, such as cash, equipment and property, and intangible assets, such as trademarks and copyrights.
A statement of a business’ financial position that lists the assets, liabilities and stakeholders’ equity at a particular point in time.
Assets or financial resources that a business uses in furthering development or to generate income. In other words, these are the assets that enable the business to produce a product or service to sell to clients or customers.
The cost of producing the goods sold by a business. It includes direct costs, such as labor and material, but excludes indirect costs, such as distribution expenses. A cash flow statement reveals the amount of cash that is entering and exiting a business.
The loss of value of an asset over time. For example, the amount of money a car is worth decreases over time.
A complete record of a company’s financial transactions that is used to prepare financial statements.
Also known as gross profit. The profit a business makes after subtracting the costs related to providing their services or making and selling their products.
A report of a business’ revenues, expenses and overall profit or loss for a specific period of time.
Jul 25, 2022 · Every business owner should know the basics of accounting and bookkeeping. Even if you don’t DIY your business finances, these terms will show up in all sorts of places: in reports, while talking with investors, and of course in conversations with your financial professionals.
Learn what an income sheet is, its components, and how it helps businesses track financial performance and profitability. Use our accounting definitions guide to discover terms, meanings, and how specific accounting words are used by bookkeepers and CPA's.
