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    Basic Accounting Terms List

    Uploaded by

    Mahadi Hasan
    This document defines 20 basic accounting terms: Accounts Receivable, Accounting, Accounts Payable, Assets, Balance Sheet, Capital, Cash Flow, Certified Public Accountant, Cost of Goods Sold, Credit, Debit, Expenses, Generally Accepted Accounting Principles, General Ledger, Liabilities, Net Income, Owner's Equity, Present Value, Profit and Loss Statement, and Return on Investment. It provides a concise definition for each term to explain accounting concepts and calculations.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Basic Accounting Terms List

    Uploaded by

    Mahadi Hasan
    241 views3 pages
    This document defines 20 basic accounting terms: Accounts Receivable, Accounting, Accounts Payable, Assets, Balance Sheet, Capital, Cash Flow, Certified Public Accountant, Cost of Goods Sold, Credit, Debit, Expenses, Generally Accepted Accounting Principles, General Ledger, Liabilities, Net Income, Owner's Equity, Present Value, Profit and Loss Statement, and Return on Investment. It provides a concise definition for each term to explain accounting concepts and calculations.

    Original Description:

    List of accounting terms

    Original Title

    3. Basic Accounting Terms List

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    This document defines 20 basic accounting terms: Accounts Receivable, Accounting, Accounts Payable, Assets, Balance Sheet, Capital, Cash Flow, Certified Public Accountant, Cost of Goods Sold, Credit, Debit, Expenses, Generally Accepted Accounting Principles, General Ledger, Liabilities, Net Income, Owner's Equity, Present Value, Profit and Loss Statement, and Return on Investment. It provides a concise definition for each term to explain accounting concepts and calculations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    241 views3 pages

    Basic Accounting Terms List

    Uploaded by

    Mahadi Hasan
    This document defines 20 basic accounting terms: Accounts Receivable, Accounting, Accounts Payable, Assets, Balance Sheet, Capital, Cash Flow, Certified Public Accountant, Cost of Goods Sold, Credit, Debit, Expenses, Generally Accepted Accounting Principles, General Ledger, Liabilities, Net Income, Owner's Equity, Present Value, Profit and Loss Statement, and Return on Investment. It provides a concise definition for each term to explain accounting concepts and calculations.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Basic Accounting Terms List

    1. Accounts Receivable AR
    Definition: The amount of money owed by your customers after goods or services have been
    delivered and/or used.

    2. Accounting ACCG
    Definition: A systematic way of recording and reporting financial transactions.

    3. Accounts Payable AP
    Definition: The amount of money you owe creditors (suppliers, etc.) in return for good and/or
    services they have delivered.

    4. Assets (Fixed and Current) FA and CA


    Definition: Current assets are those that will be used within one year. Typically this could be
    cash, inventory or accounts receivable. Fixed assets (non current) are more long-term and will
    likely provide benefits to a company for more than one year, such as a building, land or
    machinery.

    5. Balance Sheet BS
    Definition: A financial report that summarizes a company's assets (what it owns), liabilities (what
    it owes) and owners equity at a given time.

    6. Capital CAP
    Definition: A financial asset and its value, such as cash or goods. Working capital is calculated
    by taking your current assets subtracted from current liabilities.

    7. Cash Flow CF
    Definition: The revenue or expense expected to be generated through business activities (sales,
    manufacturing, etc.) over a period of time. Having a positive cash flow is essential in order for
    businesses to survive in the long run.

    8. Certified Public Accountant CPA


    Definition: A designation given to someone who has passed a standardized CPA exam and met
    government-mandated work experience and educational requirements to become a CPA.

    9. Cost of Goods Sold COGS


    Definition: The direct expense related to producing the goods sold by a company. This may
    include the cost of the raw materials (parts) and amount of employee labor used in production.

    10. Credit CR
    Definition: An accounting entry that may either decrease assets or increase liabilities and equity
    on the company's balance sheet, depending on the transaction. When using the double-entry
    accounting method there will be two recorded entries for every transaction: a credit and a debit.

    11. Debit DR
    Definition: An accounting entry where there is either an increase in assets or a decrease in
    liabilities on a company's balance sheet.

    12. Expenses (Fixed, Variable, Accrued, Operation) FE, VE, AE, OE


    Definition: The fixed, variable, accrued or day-to-day costs that a business may incur through its
    operations. Examples of expenses include payments to banks, suppliers, employees or
    equipment.

    13. Generally Accepted Accounting Principles GAAP


    Definition: A set of rules and guidelines developed by the accounting industry for companies to
    follow when reporting financial data. Following these rules is especially critical for all publicly
    traded companies.

    14. General Ledger GL


    Definition: A complete record of the financial transactions over the life of a company.

    15. Liabilities (Current and Long-Term) CL and LTL


    Definition: A company's debts or financial obligations it incurred during business operations.
    Current liabilities are those debts that are payable within a year, such as a debt to suppliers.
    Long-term liabilities are typically payable over a period of time greater than one year. An
    example of a long-term liability would be a bank loan.

    16. Net Income NI


    Definition: A company's total earnings, also called net profit or the bottom line. Net income
    is calculated by subtracting totally expenses from total revenues.

    17. Owner's Equity OE


    Definition: An owners equity is typically explained in terms of the percentage amount of stock a
    person has ownership interest in the company. The owners of the stock are commonly referred to
    as the shareholders.

    18. Present Value PV


    Definition: The value of how much a future sum of money is worth today. Present value helps us
    understand how receiving $100 now is worth more than receiving $100 a year from now. See an
    example of the time value of money here.

    19. Profit and Loss Statement P&L


    Definition: A financial statement that is used to summarize a companys performance and
    financial position by reviewing revenues, costs and expenses during a specific period of time;
    such a quarterly or annually.

    20. Return on Investment ROI


    Definition: A measure used to evaluate the financial performance relative to the amount of
    money that was invested. The ROI is calculated by dividing the net profit by the cost of the
    investment. The result is often expressed as a percentage. See an example here.

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