skip to Main Content
970-378-4830 office@yeaterassociates.com
Avel Chuklanov MLp6mkOUwkI Unsplash

Mastering Accounting Lingo

26 Accounting Terms You Need to Know

Running a business involves a lot of moving parts—parts like filing taxes, bookkeeping, and record preparation. Whether you choose to hire a bookkeeper or try to wrangle the task yourself, you will need to know the lingo. We compiled the following list to help you begin:

Accounts Payable

Money you owe to someone else for the purchase of goods or services on account.

Accounts Receivable

Money your customers owe you for the purchase of goods or services on account.

Accruals

A list of incurred expenses that you have not paid yet or sales that you have not billed for yet.

Amortization

Using a fixed schedule of regular payments over time to repay a debt.

Appreciation

When the value of an asset increases over time due to changes in inflation or interest rates.

Assets

Things you own that have value such as property, equipment, cash, trademarks, stocks, etc.

Balance Sheet

A document that provides a broad overview of your assets, liabilities, and equity.

Capital

How much money you have access to for spending, investing, etc.

Capital Expenditure (CapEx)

Spending to acquire, maintain, or update physical assets like equipment.

Cash Fow

Total cash moving in and out of your business, the difference between the amount you had at the beginning of the period (opening balance) and the amount you have at the end (closing balance).

Equity

The amount of money invested in your company.

Fixed Expense

An operating expense that is constant in total for a period but varies with production.

Variable Expense

An operating cost that is constant per unit, and varies in total with production.

Accrued Expense

An expense you have incurred but not yet paid for.

Operational Expense

How much it costs to operate your business.

Financial Statement

This statement contains the income statement and balance sheet.

Fiscal Year

The period of time you have chosen to use for accounting and financial reporting purposes.

Forecasting

Using your previous financial information and records to predict and estimate future trends.

Income Statement

A document that summarizes your income and expenses.

In the Black

When your business is making profits.

In the Red

When your business is making a loss.

Liabilities

Debts your company owes.

Net Income

Your revenue minus expenses (including taxes, interest, etc.).

Profit and Loss (P&L) Statement

Lists earnings, expenses, and net profits for a specified period.

Reconciliation

The process of checking your records with another set of records (such as bank statements) to ensure your numbers are correct.

Revenue

The money you collect for your goods or services (before any expenses have been deducted).

With these terms in your pocket, you’re ready to tackle your business. Should you decide to hand off bookkeeping to a team of experts, give Yeater & Associates Greeley bookkeeping specialists a call at 970-378-4830.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top