Glossary of Accounting Terms

Terms beginning With: Select Letter A B C D E F G H I J L M N O P Q R S T U V W

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A
Absorbed overhead
See overhead charged
Account
Page in the ledger recording the common aspect of different transactions. Real, personal, nominal accounts. A record of monetary transactions grouped by categories.
Account payable
Creditor. Money owed by a business. Current liability.
Account receivable
Debtor. Money owed to the business.
Accountancy
Accounting.
Accounting
Technique of preparing accounting reports from books and other records. Based on concepts and principles such as: true and fair, money, cost, conservatism, consistency, comparability, entity, going concern, recognition of profit etc. Dependent upon GAAP & IAS (International Accounting Standards).
Accounting concepts
Accounting principles. Practical rules which enable bookkeeping records of transactions to be converted into accounting reports.
Accounting language
Special accounting meaning rather than the ordinary meaning of words.
Accounting period
Period of time between one balance sheet and the next. Period of the income statement. Usually a month, quarter or year.
Accounting principles
Accounting concepts.
Accounting reports
Reports on the situation and progress of an organization in financial terms. For example, balance sheet and income statement (income statement).
Accrual
Liability. Creditor. Payable. Current liability. Accounting concept: income and expense for the accounting period must be included whether for cash or credit. Matching of revenues with appropriate expenses to provide a meaningful net income figure for an accounting period, independent of the time cash may have been exchanged.
Accumulated depreciation
A total amount by which the original cost of a fixed asset shown on the balance sheet has been reduced to represent its deterioration and obsolescence. For example, consider a water works that cost one million dollars and each year depreciation of $50,000 is recorded against it. After five years, its accumulated depreciation would be 5 x $50,000 or $250,000. The main purpose of depreciation is to allocate fixed asset cost to expense for profit computation for future accounting periods. It accumulates a fund (but not cash) that could be used to replace assets. "Reserve" for depreciation. "Provision" for depreciation.