The world of accounting uses many terms to define different actions, circumstances and classifications for preparing financial statements with the most accurate information possible. Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to aid managers decision making process in achieving business goals. Accounting period expenditure and revenue measurement within a predetermined time frame. Noun n the codes c and u show whether a noun, or a particular sense of a noun, is countable an agenda, two agendas or uncountable. 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 terminology guide over 1,000 accounting and. The institute of management accountants ima recently updated its definition as follows. Accounting the systematic recording, reporting, and analysis of financial transactions. Glossary of financial accounting terms pearson education.
The following is a list of common nonprofit accounting terminology. Investorwords the most comprehensive investing glossary on the web. 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. Glossary of terms relating to hong kong financial reporting standards glossary. Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to. Corporations currently operate on a fiscal year beginning. Basic accounting concepts n matching n revenues and expenses shown on the income statement must be matched for the period. In the beginning it can act as a plan and in the end it can act as control to measure performance against so that future plans can be improved.
Consolidated financial statements financial statements of a group in which assets, liabilities. Glossary of notforprofit financial and accounting terms. Glossary of management accounting terms the definition of one word or phrase may depend on understanding another word or phrase defined elsewhere in the reference list. Harold averkamp cpa, mba has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Over 18000 financial and investing definitions, with links between related terms. Common accounting terminology glossary alphabetical order account an account is a record used to properly classify the activity recorded in the general ledger. Most modern accounting software is always connected to the internet. Short run the time during which a companys management cannot change the effects of certain past decisions. The balance sheet is one of the two most common financial statements produced by accountants. This is a term used in old accounting systems and not. Information is an important part of any such system and the study unit will go on to.
Dont feel left out in conversations and dont be left behind because you arent sure what someone is talking about. Financial statements records that outline the financial activities of a business, an individual or any other entity. Management accounting financial definition of management. It stores a business financial data, and is often used to perform business transactions. It is thus, a formal mechanism by means of which costs of products or services are ascertained and controlled. You need to understand exactly what is meant by accounting terms like these. Accounting terms entering into the accounting field can be a little confusing at first with all of the new terminology to learn. Plain language definitions with sample applications. Management accounting reporting designed to assist management in decisionmaking, planning, and control.
Generally accepted accounting principlesthe standards and rules that accountants follow while recording and reporting financial activities creditor a person or business to whom a liability is owed. Administrative costs costs of managing the organization, including the costs of top administrative functions and various staff departments such as accounting, data processing, and. Words in bold indicate that such a definition is available. The following is a glossary of words and phrases crucial to the accounting profession.
Accounting terminology can be quite a mouthful and hard to remember, especially if you dont have much prior experience with financial or management accounting. Accounts payable trial balance see schedule of accounts payable. Nonprofit accounting terminology posted on wednesday, november 04, 2015 share. List of key accounting terms and definitions investorguide. Accounts payable ap accounts payable ap definition. Depreciation is recorded in the financial statements of an entity as a reduction in the carrying value of the asset in the balance sheet and as an expense in the income statement. Asset management a service from a financial adviser to spread a persons investment between a number of assets, such as shares, government bonds, cash and property, so that they can potentially earn more money asset management insurance cover for an event such as death, rather than an event that might happen, such as fire or theft atm. In the short run, many costs are assumed to be fixed and unchangeable. Accounts payable amounts due for payment to suppliers of goods or services, also described as trade creditors accounts receivable amounts due from customers, also described as a trade debtors. This method of preparing accounting reports on the basis of level or centre is known as responsibility accounting. Internal managers, rather than auditors, use cost accounting most of the time to identify aspects of their company where costs can be cut. He is the sole author of all the materials on accountingcoach. In management accounting or managerial accounting, managers use the provisions of.
Accounting i chapter 9 vocabulary term definition accounts payable ledger the subsidiary ledger containing vendor accounts. Return on assets the relationship between net profit and total assets. Glossary of business terms adjective adj headwords for adjectives followed by information in square brackets only before a noun and not before a noun show any restrictions on where they can be used. Internal managers, rather than auditors, use cost accounting most of the time to identify. Does accounting terminology have your head spinning. Most accounting software programs allow the bookkeeper to export information to excel or pdf for various uses. Management accounting simple english wikipedia, the free. A book with the policies, procedures, standards, and guidelines for the accountants of an individual proprietorship or company. Cost accounting a branch of accounting that observes and calculates the actual costs of a companys operations. In management accounting the period may be as frequent as the management chooses weekly, monthly, quarterly and annual reporting are all used.
Accounting software is software that does various accounting and bookkeeping tasks. Cost a financial measure of the resources used or given up to achieve a stated purpose. Nonprofit accounting is a specialized industry and as such uses specific terms that those outside of the. The wealthhow article below provides a glossary of accounting terms and definitions that are most commonlyused. With accurate financial records, the equation balances. Account current a monthly statement from the company reflecting premiums written and commissions deducted by the agency for agency bill policies. Reasonable management salaries are the salaries that management believes are reasonable to be paid if external persons were to be appointed to management positions in the organisation. Corporations currently operate on a fiscal year beginning on july 1st and ending june 30th. A noncash operating expense that reduces the value of a tangible asset as a result of wear and tear, age, or obsolescence. Nonprofit accounting is a specialized industry and as such uses specific terms that those outside of the nonprofit world may not be familiar with. Phone 2015680249 glossary of utility finance and accounting terms used in our seminars. Mel king institute definitions of accounting terms for. The nysscpa has prepared a glossary of accounting terms for accountants and.
A number of factors must be considered when setting up a management accounting system and the management style and. Prior to actually beginning work as an accountant, there is generally exposure to accounting terminology and concepts. However, the relationship between these terms and cost accounting is ambiguous. If management accounting system is suitably designed on the basis of organization structure, then the person responsible for any particular task can easily be pointed out. A formal statement of managements expectations of sales, expenses, volume, and other financial transactions of an organization. General accounting terms and definitions accounting cycle composed of several accounting periods spanning over twelve consecutive months. Common accounting terminology glossary alphabetical order. Articles of incorporation a legal document that identifies basic characteristics of a corporation, which is a part of.
Mel king institute definitions of accounting terms for financial statements for cdcs 1. Accounting chapter 1 terms term definition accounting. Account balance an account balance is the sum of debit entries minus the sum of credit entries in an account. Accounting concepts accounting concepts are the principles that guide the preparation of accounting information. These other types of accounting are covered in other books. Accounting accounting keeps track of the financial. Were here to help with this handy list that defines the most common accounting terms. Using this definition, accounting can be seen to be about the identification and recording of business transactions as a way of assisting the management and planning of a business.
The term lean accounting was coined during that period. A branch of accounting that observes and calculates the actual costs of a companys operations. The amount of money a company owes creditors suppliers, etc. In this spirit, weve compiled this handy guide to the most commonly used accounting terms for your reference. Terms like revenue, expenses, gross profit, depreciation, bad debt, and fixed assets have precise definitions when used in business accounting. Management accounting and managerial accounting are synonymous. Glossary of accounting terms and definitions wealth how. Short run the time during which a companys management cannot change the effects of certain past.
This section pertains to potentially confusing terms that relate to. Fais public utility finance and accounting seminars seminars for professionals concerned with electric, gas and water companies financial accounting institute p. Bookkeeping and accountancy deal with maintaining record of all the transactions that a businessindividual makes. Balancing shortterm commercial interests against long run value for. Learn vocabulary, terms, and more with flashcards, games, and other study tools. As cloud accounting providers, we feel strongly about eliminating jargon and making accounting simple and accessible for everyone. A systematic way of recording and reporting financial transactions for a business or organization. A number of factors must be considered when setting up a management accounting system and the management style and structure of an organisation will affect the system which it creates.200 1041 427 1030 711 1537 215 496 797 231 575 833 1574 1057 852 939 110 1303 774 1480 1607 1479 550 1162 458 183 998 1048 1519 1069 51 1611 117 834 1021 1154 465 1201 440 55 524 762 975 159 112