Plain language definitions with sample applications. Introduction to accounting basics this explanation of accounting basics will introduce you to some basic accounting principles, accounting concepts, and accounting terminology. There are two ways to keep books when it comes to the timing of how items are recorded. Choose from 500 different sets of basic accounting terms flashcards on quizlet. Consolidated financial statements financial statements of a group in which assets, liabilities. Accounting i chapter 9 vocabulary term definition accounts payable ledger the subsidiary ledger containing vendor accounts. Basic accounting terms, acronyms, abbreviations and concepts to remember. Bookkeeping terms and basic accounting definitions. The basic accounting equation states that assets equal liabilities and owners equity, but can be modified by operations applied to both sides of the equation. Mel king institute definitions of accounting terms for. Like it or not, accounting is one of the tasks that every business owner has to deal with. Terminology and definitions accounting this manual begins by defining the basic terms used in accounting functions.
Read the following definitions carefully and make sure that you understand exactly what is meant by each of these accounting terms. Corporations currently operate on a fiscal year beginning on july 1st and ending june 30th. Jul 01, 2015 hello friends, this session will help you to understand the basic accounting terminology basic accounting terms in a very easy language. Thats why weve compiled a list of the 42 most common accounting terms, along with their abbreviations, acronyms and definitions. Accounting period expenditure and revenue measurement within a predetermined time frame. Allocate to assign a whole item of cost, or of revenue, to a simple cost. The nysscpa has prepared a glossary of accounting terms for accountants and. Accounts payable trial balance see schedule of accounts payable. General accounting terms and definitions accounting cycle composed of several accounting periods spanning over twelve consecutive months.
Accounting equation the relationship between assets, liabilities and. Modern accounting systems tend to use open ended accounting. All business transactions can be stated in terms of changes in the three elements of this accounting basic equation which is to the base of all accounting. In any one given accounting period, you should try to match the revenue you are reporting with the expenses it took to generate that revenue in the same time period, or over the periods in which you will be receiving benefits from that expenditure. Toolkits are designed to provide you with easy to access information on key subject areas. It also lists creditors who have been owed money for the longest period. Glossary of terms this glossary is extracted from the hong kong financial reporting standards hkfrss including hong kong accounting standards hkass issued. Download cbse notes, neet notes, engineering notes, mba notes and a lot more from our website and app. Business transactions business transactions means exchange of value for value in goods or services against money measured in terms of money relevant to the business between to or more persons or firms for an event to be a business transaction must possess the quality of economic. A business entity is a commercial corporate or other organisation that is formed in order to engage in business activities.
A record that holds the results of financial transactions. List of key accounting terms and definitions 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. Articles of incorporation a legal document that identifies basic characteristics of a corporation, which is a part of the application submitted to a state to become a corporation. Its time to roll up those sleeves and build your accounting vocabulary. Though its by no means a definitive list, it covers many of the basics youll need to start or refresh. The world of accounting uses many terms to define different actions, circumstances and classifications for preparing financial statements with the most accurate information possible. Chartstring what is typically called an account or thought of by most people as an account is called a chartstring in peoplesoft ps. Glossary of financial accounting terms the definition of one word or phrase may depend on understanding another word or phrase defined elsewhere in the reference list. The time during which the business financial information is being tracked, usually done on a monthly basis. Bookkeeping and accountancy deal with maintaining record of all the transactions that a businessindividual makes. Accounting meaning, definition and basic of accounting systems. Accounting glossary of terms account a record of debit and credit entries to cover transactions involving a particular item, client or concern on the general ledger. Accounting policies accounting policies are the specific accounting bases selected and consistently followed by a business.
Glossary of notforprofit financial and accounting terms. Glossary of accounting terms and definitions wealth how. Duncan williamson, times educational supplement, december 2004. Understanding the financial condition of the business and the accounting principles used to determine the financial condition is critical for business owners. Bookkeepers working for smaller businesses might do some basic accounting duties. Financial statements records that outline the financial activities of a business, an individual or any other entity. Glossary of utility finance and accounting terms used in our seminars letters in parenthesis, preceding the definition, identify the sources used in compiling the glossary.
A service that oversees, measures, and evaluates financial information for decision making. Sector accounting standards ipsass on issue as at december 31, 2006. Account current a monthly statement from the company reflecting premiums written. Glossary of financial accounting terms pearson education. This glossary contains all terms defined in the 24 accrual basis international public. Once you become familiar with some of these terms and concepts, you will feel comfortable navigating through the explanations, quizzes, quick tests, and other features of. Accounting terminology guide over 1,000 accounting and. Understanding the terminology will help you understand the concepts and their relevance to you, and more importantly, they will help you analyze and run your small business. To successfully manage a companys bookkeeping or accounting, knowledge of terminology is a must. Accounting systems are designed to show the increases and decreases in each part of the above accounting basic equation in a separate record.
All the information you need to run a successful small business is contained. To help with this, weve compiled an assortment of basic financial terms and acronyms and created a simple accounting glossary for beginners. A business entity is a commercial corporate or other organisation that is formed in order to engage in business activities, usually for the sale of a. Accounting policies need to be appropriate to the circumstances of a business so that, when applied to accounting transactions, the resulting accounting information. Accounts payable sundry creditors short term or current financial obligations that are created through the purchase of merchandise, or obtaining of service. The examination of documents, records, reports, systems of internal control, accounting and financial procedures, and other evidence for one or more of the following purposes.
Accounting glossary center for nonprofit excellence. Basic accounting terms and concepts flashcards quizlet. Glossary of business financial terms 1 glossary of business financial terms accrual basis accounting. List of key accounting terms and definitions investorguide.
And whether you intend to do your own bookkeeping or hire professionals, you will need to become familiar with some basic accounting terms. Learn basic accounting terms with free interactive flashcards. In order to pursue an accounting or bookkeeping career, knowledge of the terminology is a must. Dec, 2019 like it or not, accounting is one of the tasks that every business owner has to deal with. Get key bookkeeping and accounting terms to better manage your clients. Typical trade credit periods range from 30 to 60 days but each agreement is different. Accounting the american institute of certified public accountants aicpa describe accounting as the the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof. Accounting definitions and basic accounting terms to know as a small business owner. This explanation of accounting basics will introduce you to some basic accounting principles, accounting concepts, and accounting terminology. Dont feel left out in conversations and dont be left behind because you arent sure what someone is talking about. Some terms that apply to the financial statements include. This accounting terminology checklist outlines the terminology, concepts and conventions that are accepted within the accounting profession.
Basic financial statement, usually accompanied by appropriate. Basic accounting terms accounting terminology letstute. Gambia 2004 1 accounting principles and definitions. Learn more about the above accounting basic equation and debitscredits. Discover the meaning of common bookkeeping terms, words and phrases from this quick a z style guide. Accountingwords investorwords the best investing glossary on the web.
Common stock has no preference and no fixed rate of return. Accountants use terminology foreign to many outside of this profession. A method of dividing expenses among different program, administrative and fundraising categories using a reasonable and consistent basis common. The equation that is the basis of the balance sheet. Consolidated financial statements financial statements of a group in which assets, liabilities, equity, income, expenses and cash flows of the parent company and its. Start studying basic accounting terms and concepts. Business transactions business transactions means exchange of value for value in goods or services against money measured in terms of money relevant to the business between to or more persons or firms for an event to be a business transaction must possess the. Learn vocabulary, terms, and more with flashcards, games, and other study tools. List of key accounting terms and definitions 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. Lets learn some accounting basic terms basic accounting. Most small business owners dont have a degree in accounting, making it a daunting subject to tackle. Accounting is the analysis and interpretation of bookkeeping records. The tasks that bookkeepers and accountants do vary between businesses.
Words in bold indicate that such a definition is available. Mel king institute definitions of accounting terms for financial statements for cdcs 1. An area of accounting that deals with external reporting to parties outside the firm. Basic accounting terminology 101 accounting terms, principles, and concepts prior to actually beginning work as an accountant, there is generally exposure to accounting terminology and concepts. The act of entering and sorting financial data into the bookkeeping system used by the company or accountant. Define the following financial statements in accounting. The alphabetical layout will help you easily find the word you need. This is a term used in old accounting systems and not used much these days.
Gambia 2004 1accounting principles and definitions. Glossary of accounting word html accounting glossary. In addition, in order to discuss and understand your business with your accountant, bookkeeper, banker, or other business associates you need to be familiar with basic accounting and bookkeeping terms. Entering into the accounting field can be a little confusing at first with all of the new terminology to learn. Hello friends, this session will help you to understand the basic accounting terminology basic accounting terms in a very easy language. Basic accounting terms are very important for accounting s beginner to understand it. Knowing accounting terminology will make bookkeeping easier.
Glossary of defined terms ipsas 1 to ipsas 12 ifac. Basic accounting terminologies include all those important terms which are frequently used while studying financial accounting. An organization created with the objective of making a profit from the sale of goods or services. Accounting period any period of time utilised to measure accounting performance e. Once you become familiar with some of these terms and concepts, you will feel comfortable navigating through the explanations, quizzes, puzzles. Theres often overlap, and the duties may change a lot from one business to another. This session is useful for anyone who wants to understand. Lets invoke popeye the sailor mans friend wimpy who always says, ill gladly pay you tuesday for a hamburger today. Powerpoint slide on basic accounting terms compiled by sukhbinder singh. Weve compiled a list of the 42 most common accounting terms, along with their abbreviations where appropriate and definitions. Study define the following financial statements in accounting terms flashcards flashcards at proprofs the following flashcards are the basics of accounting.
Accounting definitions basic accounting terms to know. The wealthhow article below provides a glossary of accounting terms and definitions that are most commonlyused. Understanding the meaning behind basic accounting terms opens the communication between accountants and business. This record is called an account for example, since cash appears on the all balance sheets, a separate record is kept of the increases and decreases in cash likewise, a separate record is kept of the increases and decreases for supplies, equipment.
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