Recruitment Glossary

Glossary of Accountancy and Financial recruitment terminology

(ACCA): Association of Chartered Certified Accountants
(ACMA): Associate Chartered Management Accountant
Accounts Payable: Accounts of monies in which you owe. A liability that is usually created when you have made a purchase or purchases on credit.
Accounts Receivable: Accounts of monies owed to you for the sale of goods or services.
Accrual basis: This is the method of accounting where transactions are recorded as they occur regardless of when payment for that transaction is made or received
Accrued Assets: Assets from revenues earned but not yet received.
Accrued Expenses: A liability incurred during the accounting period for which payment has not been made.
Accumulated Depreciation: The running balance of the depreciation taken on an asset.
Accounts Receivable: Accounts of money owed to you for the sale of goods or services.
Aging: The grouping of like transactions by date. Example - sorting invoices by due date.
Adjusting Entries: Special accounting entries that are made when you close the books at the end of an accounting period to bring the ledger up to date.
Asset: Items that a business or individual owns or are owed.
Audit: The scrutinising of accounting records and supporting documents for accuracy and completeness.
Audit trail: The information within the accounting system that reveals the effects of a transaction.
Bad Debt: An account or receivable that has been deemed unrecoverable and written-off.
Badwill (Negative Goodwill): The excess amount of fair value of an asset or assets over the purchase price.
Balance Sheet: A statement listing the total assets, liabilities, and owners' equity; indicating the net worth of the company for the given time period.
Bonds Payable: A long-term liability that represents a promise to pay a sum of money plus interest at a maturity date (a designated date in the future).
Book Value of an Asset: Cost of the asset (the amount that was paid for it) minus accumulated depreciation.
(CIMA): Chartered Institute of Management Accountants
(CIPFA): Chartered Institute of Public Finance and Accountancy
Capital: The owner's or owners' rights to assets of a business.
Cash basis: An accounting method where transactions are recorded when the actual change of payment occurs, regardless of when the goods or services are delivered.
Cash equivalents: Highly liquid short-term investments. Examples include money-market funds and treasury bills.
Certified Financial Statements: Financial statements that have been audited and certified by a CPA.
Chart of accounts: A numerical listing of a business’s accounts.
Closing Entries: Journal entries made at the end of the period to return the balance in all accounts to zero and ready the account for the next reporting period.
Contra account: An account that follows another account and has a balance opposite of it. For example accumulated depreciation is a contra asset account; it would have a credit balance and be subtracted from the asset's debit balance to obtain the book value or carrying amount of the asset.
(CPA): Certified Public Accountant
(Cr): The abbreviation for Credit.
Credit: An entry on the right side of an account - decreases assets or increases liabilities.
COGS The abbreviation for Cost of goods sold
Debit: An entry on the left side of an account - increases assets or decreases liabilities.
Depreciation: The allocation of the cost of a tangible, long-term asset over its useful life. The process of spreading the cost of acquiring a fixed asset over its useful economic life.
Dividends: Distributions by a corporation to its shareholders. Dividends decrease both the assets and retained earnings of the corporation.
Double Entry is the principle of accounting which requires that every transaction has two effects one of which is a debit and the other of which is a credit of the same amount.
Dr The abbreviation for Debit.
Expenses: The daily costs incurred in running a business.
Extraordinary Gain or Loss: A gain or loss that is both unusual and infrequent.
FIFO (First IN First OUT) The inventory system leave new inventory in stock until the old ones sold by legal terms.
Finished Goods Inventory: Completed goods held in inventory that have not yet been sold.
Fixed Asset: An asset acquired by a business where there was no intention to make money from immediately reselling the asset. e.g A Van used by a building company.
Fiscal: A 12 month accounting period. Not necessarily a calendar year.
General Ledger: The master record of all the balance sheet and income statement account balances.
General partnership: A partnership form of business where each partner is a part owner and shares in the privileges and risks of ownership.
Gross profit: The amount of net sales minus the amount of cost of goods sold (also called cost of sales).
(ICAEW) Institute of Chartered Accountants in England and Wales
(ICAI) Institute of Chartered Accountants in Ireland Constitutes the Republic of Ireland and Northern Ireland. It is considered to be both a British and Irish professional body.
(ICAS) Institute of Chartered Accountants of Scotland
Income statement: A statement that summarises revenues and expenses.
Intangibles: Assets that have no physical form but that have value. Examples are copyrights and patents.
Invoice: A form, sent from the seller to the buyer, listing the items bought, price, terms etc.
Journal: A chronological record of transactions, also known as the book of original entry.
Just-in-Time: A system where items are produced or received just in time to be used or sold.
Ledger: A book containing accounts to which debits and credits are posted from books of original entry.
Liability: A debt or obligation. Probable future sacrifice of economic benefits; or the entity owes somebody something.
Net sales: The amount left when returns, discounts, and allowances are deducted from sales revenue.
Note payable: A written promise to pay a determined amount in the future.
Operating Expenses: The expenses that are incurred from the daily operation of the business.
Owners' equity: The owners' right to the assets of an entity.
Prepaid Expenses: Amounts that are paid in advance for product is not used up during the accounting period.
Prepayment: A Prepayment is a type of asset arising from the fact that the business has already been invoiced for the right to all or part of a service in a future period e.g. rent for next year, paid this year.
Post: The process of transferring amounts from a journal to the appropriate ledger accounts.
Purchase order: Written instructions to a vendor to ship and bill for the listed items.
Retained earnings: Capital earned operations of the corporation.
Reversing Entry: An entry made to reverse a prior entry.
Revenue: Amounts earned by delivering goods or services to customers.
Stock: Stock is the set of those assets held by the business intended for resale in their current form or in a modified form. Stock includes raw materials, components, work in progress and finished goods.
Trial Balance: A work sheet showing the balances in each account; used to prove the equality of debits and credits.
UEL: The abbreviation for useful economic life.
Useful economic life (UEL): The useful economic life of a fixed asset is the time period for which the asset is likely to be useful in generating profit for a company (or meeting the aims of a charity).
WIP
WIP is the abbreviation for Work in Progress
Work in progress is the set of assets held by a business which are part way through some process after which they can be resold. Once completed the articles will cease to be WIP and become finished goods.