Accounting is important for businesses to work smoothly. Important activities like investing and collecting, reporting, and analyzing financial data rely on the principles and procedures of accounting. What are the 50 words associated with accounting?
This article is for people or students who want to understand the most common accounting terms. We will specifically explain at least 50 words associated with accounting.
50 Words Associated with Accounting / A to Z Accounting Terms
Below is a list of accounting terms with their meaning. These 50 words associated with accounting are ordered from A to Z.
A to Z Accounting Terms List:
- Accountancy
Accountancy is another word for accounting. It refers to the work or profession of an accountant.
- Accountant
A person who performs accounting for a career. The types of activities vary significantly. Some accountants are clerks who do bookkeeping functions, and some are business advisors to large companies.
- Assets
Resources or items of value owned by a company.
- Auditing
Examination of financial statements to ensure accuracy and compliance.
- Audit fee
a fee charged by an auditor for auditing a company’s accounts.
- Auditor
A person who audits.
- Audit programme
A listing of all the steps to be taken when auditing a company’s accounts
- Budget
A financial plan that outlines expected revenues and expenses over a specific period.
- Bookkeeper
A person whose job is to keep an accurate record of the accounts of a business.
- Balance
(1) The net amount left in an account after adding the increases and deducting the decreases. (2) The situation in which debits equal credits.
- Balance sheet
A listing of the assets, liabilities, and equity of an entity at a point in time, usually the end of a month, quarter, or year. It is one of the four financial statements required in a full financial report. The balance sheet tells the reader what the entity owns (assets) and what the entity owes (liabilities) at that moment. The difference between the two is equity.
- Capital
Cash or other types of funds available for use in business. Accountants recognize different subcategories of capital.
- Working capital
Working capital defines the sum that remains after subtracting current liabilities from current assets.
- Equity capital
Equity capital specifies the money paid into a business by investors in exchange for stock in the company.
- Debt capital
Debt capital covers money obtained through credit instruments such as loans.
- Capital loss
The decrease in the value of a capital asset that the owner of the asset realizes when the asset is sold.
- Cash flow
The movement of cash into and out of a business.
- Deduction
Money that is removed from our earnings to pay for tax, national insurance, etc., is called a deduction.
- Depreciation
The reduction in the value of an asset over time.
- Dividends
Payments made to shareholders from a company’s profits.
- Equity
The residual interest in the assets of an entity after deducting liabilities; often referred to as net worth or shareholders’ equity.
- Expenditure
The money that people receive for working is income. However, the money that they spend is known as expenditure.
- Financial Statements
Reports that summarize the financial activities and position of a business.
- Gross
Gross is an adjective used to describe an employee’s earnings before tax, national insurance, etc.,
have been taken away.
- GAAP (Generally Accepted Accounting Principles)
Standardized guidelines for financial accounting.
- IFRS (International Financial Reporting Standards)
Global accounting standards used by many countries.
- Liabilities
Debts or obligations that a company owes to others.
- Loss
The negative difference between revenue and expenses.
- Net Income
The total revenue minus total expenses over a specific period.
- Payroll
The total amount a company pays to its employees.
- Product life cycle
The time between the beginning of a product and its discontinuance. A product life cycle is similar to the lifetime of a person from birth to death.
- Profit
A general term that means the amount of earnings or the excess of revenue over expenses.
- Profitability
A company’s capacity to earn income. Profitability can relate to performance in the past or to predictions for the future.
- Strategic plan
The document that identifies an entity’s purpose and activities or accomplishments for the next five or more years. A strategic plan sets priorities for financial resources.
- Taxation
The process of imposing levies on individuals or entities by a government.
- Tax avoidance
The structuring of economic behaviors so that the least amount of tax is paid by the taxpayer. Tax avoidance uses every legal means to reduce tax payments. Contrast with tax evasion, which uses illegal means to avoid paying taxes.
- UAA
Uniform Accountancy Act.
- Uncollectible account
A debt from a customer that the company decides will not be paid. The company removes the account from the total of accounts receivable.
- Understatement
A form of financial statement fraud that states liabilities or expenses at less than the actual amount to reach some desired financial target.
- Underwriting
The process of evaluating and assuming risk for insurance or securities.
- Weighting
A weighting is an additional amount of money paid to an employee to compensate him/her for living in an expensive area.
- Working capital
An analytical instrument for assessing short-term liquidity. Calculated by subtracting current liabilities from current assets, the working capital formula reveals the surplus of liquid assets accessible for operational needs.
- XBRL
Extensible Business Reporting Language.
- Yellow Book
The colloquial expression “Yellow Book” refers to Government Auditing Standards, which serve as the guidelines for auditing government programs, activities, and functions. These standards are encapsulated within the Yellow Book.
- Zero defects
A situation in which all products conform to specified requirements, either precisely at the specified value or falling within a designated range of the specified value.
Other Accounting Vocabulary Words
Here is another list of accounting vocabulary words with meaning:
- Cash Receipt
Money received from a customer for a billing, deposit, retainer, or donation. Also, money returned from a vendor.
- Trust Accounting
Maintaining accounting records for assets and/or liabilities that you are the custodian of. These would be assets and liabilities that are owned by your clients, but you manage for them.
- Income
Money earned by a business.
- Income Statement
A financial statement summarizing revenues, expenses, and profits over a specific period.
- Revenue
Total income generated by a business.
- Accrual Accounting
Recording revenue and expenses when they are earned or incurred, not when cash is exchanged.
- Internal Control
Procedures to safeguard a company’s assets and ensure accuracy in financial reporting.
- Financial Ratios
Comparisons of financial data to assess a company’s performance.
- Cash Accounting
Recording transactions only when cash is exchanged.
- Fiscal Year
A 12-month accounting period for financial reporting.
- Profit Margin
The difference between the cost of making something and the price it’s sold for.
- Ledger Balance
The amount of money in an account after all transactions are recorded.
- Financial Advisor
A person who gives advice on managing money.
- Overspending
Spending more money than planned.
- Rise (n)
An increase.
- Rise (v) = Raise (US)
To move upwards or to become higher.
- Proprietor
A person who owns the business.
- Depreciation
Decrease in book value of an asset due to its use or obsolescence.
- Discount
A reduction in the price of goods sold or in amount.
25 Accounting Terms in Example Sentences
The table below shows a number of accounting vocabulary in sentences.
| Accounting Terms | Accounting Terms in Sentences |
|---|---|
| Accountancy | We are accountancy students. We study accountancy. |
| Balance | A balance is the amount of money you have in your bank account. |
| Payroll | The office has a weekly payroll of £10,000. |
| Revenues | Oil revenues have risen with the rise in the dollar. |
| Rise (v) | Prices have risen by ten percent. |
| Rise (n) | There has been a 10 percent rise in inflation. |
| Deduction | Tax deductions have been made. |
| Gross | Investments show a gross profit of 30 %. |
| Net profit | Net profit is the money you are left with after taxes, costs, etc., have been taken away. |
| Revenue | Our company’s annual revenue rose by 25 %. |
| Stock options | Some companies offer their employees stock options, which means that the employees can buy stocks at a price lower than the normal price. |
| Weighting | I was offered an annual salary of 50000 dollars and a 5000-dollar New York weighting. |
| Income vs Expenditure | Income is another word for the money that people receive for working. The money that they spend is known as expenditure. |
| Proprietor | Enquiries should be made to the proprietor. |
| Discount | Our company is offering a 10 % discount on all laptops these two months. |
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