For simplicity we have arranged the glossary in three columns category, terminology and meaning. Where category defines in which category or accounting head it belongs in general, later we will define the concept and proper accounting head / category.
| Category | Terminology | Meaning |
| Basic Accounting Terms | Accounting | The process of recording, categorizing, summarizing, analyzing, and reporting financial information. |
| Basic Accounting Terms | Bookkeeping | Recording and organizing a business’s financial transactions. |
| Basic Accounting Terms | Account | A record used to track a specific type of financial activity. |
| Basic Accounting Terms | Accounting Period | A specific period for which financial information is reported. |
| Basic Accounting Terms | Accounting Cycle | The complete process from recording transactions to preparing financial statements. |
| Basic Accounting Terms | Accounting Equation | Assets = Liabilities + Equity. |
| Basic Accounting Terms | Double-Entry Accounting | A system where every transaction affects at least two accounts. |
| Basic Accounting Terms | Single-Entry Accounting | A simpler system that records transactions primarily as income and expenses. |
| Basic Accounting Terms | Chart of Accounts | A structured list of accounts / category used by a business to organize transactions. |
| Basic Accounting Terms | General Ledger | The main record containing all financial accounts and transactions. |
| Basic Accounting Terms | Subledger | A detailed record supporting a specific general ledger account. |
| Basic Accounting Terms | Trial Balance | A report showing account balances used to check whether debits and credits balance. |
| Basic Accounting Terms | Fiscal Year | A 12-month accounting period used by a business for financial reporting. |
| Basic Accounting Terms | Accounting Method | The method used to recognize income and expenses, such as cash or accrual accounting. |
| Basic Accounting Terms | Accrual Accounting | Recording revenue and expenses when earned or incurred, rather than when cash moves. |
| Basic Accounting Terms | Cash-Basis Accounting | Recording transactions generally when cash is received or paid. |
| Assets | Asset | Something of value owned or controlled by a business. |
| Assets | Current Asset | An asset expected to be converted into cash or used within the short term. |
| Assets | Cash | Money available to the business. |
| Assets | Cash Equivalents | Highly liquid short-term investments that can be readily converted into cash. |
| Assets | Accounts Receivable | Money customers owe the business. |
| Assets | Inventory | Products or materials held for sale or use in production. |
| Assets | Prepaid Expense | An expense paid in advance before the related benefit is received. |
| Assets | Fixed Asset | A long-term asset used in business operations. |
| Assets | Property, Plant & Equipment (PP&E) | Long-term physical assets used by a business. |
| Assets | Intangible Asset | A non-physical asset such as a patent, trademark, or software right. |
| Assets | Goodwill | An intangible asset generally arising from the acquisition of a business. |
| Assets | Accumulated Depreciation | Total depreciation recorded against a fixed asset over time. |
| Assets | Depreciation | Allocation of the cost of a tangible long-term asset over its useful life. |
| Assets | Amortization | Allocation of the cost of certain intangible assets or other applicable amounts over time. |
| Assets | Capital Expenditure (CapEx) | Money spent acquiring or improving long-term assets. |
| Liabilities | Liability | A financial obligation of a business. |
| Liabilities | Current Liability | An obligation generally due within the short term. |
| Liabilities | Accounts Payable | Money the business owes to vendors or suppliers. |
| Liabilities | Accrued Expense | An expense incurred but not yet paid or invoiced. |
| Liabilities | Short-Term Debt | Debt generally due within the short term. |
| Liabilities | Long-Term Debt | Debt due beyond the short term. |
| Liabilities | Loan Payable | Amount owed under a loan agreement. |
| Liabilities | Interest Payable | Interest that has been incurred but not yet paid. |
| Liabilities | Payroll Liabilities | Amounts owed related to payroll, such as employee deductions and applicable payroll taxes. |
| Liabilities | Unearned Revenue | Money received before the business has delivered the related goods or services. |
| Liabilities | Deferred Revenue | Revenue received or billed before it is recognized as earned under the applicable accounting rules. |
| Liabilities | Working Capital | Current assets minus current liabilities. |
| Equity | Equity | Assets remaining after liabilities are deducted. |
| Equity | Owner’s Equity | Owner’s interest in a business. |
| Equity | Shareholders’ Equity | Owners’ residual interest in a corporation. |
| Equity | Capital | Money or other resources invested in a business. |
| Equity | Owner’s Draw | Money or assets taken from a business by its owner for personal use. |
| Equity | Retained Earnings | Cumulative profits retained in a corporation after distributions, subject to applicable accounting rules. |
| Equity | Dividends | Distributions of earnings to shareholders. |
| Equity | Common Stock | Ownership interest represented by common shares in a corporation. |
| Equity | Additional Paid-in Capital | Amount invested by shareholders above the stated or par value of shares, where applicable. |
| Revenue & Income | Revenue | Income generated from a business’s primary activities. |
| Revenue & Income | Sales Revenue | Revenue generated from selling products or services. |
| Revenue & Income | Gross Revenue | Revenue before applicable deductions. |
| Revenue & Income | Net Revenue | Revenue after applicable returns, allowances, discounts, or similar deductions. |
| Revenue & Income | Operating Income | Income generated from normal business operations after operating expenses. |
| Revenue & Income | Other Income | Income from activities outside the company’s primary operations. |
| Revenue & Income | Interest Income | Income earned from interest. |
| Revenue & Income | Gross Sales | Total sales before applicable deductions. |
| Revenue & Income | Net Sales | Sales after applicable returns, allowances, and discounts. |
| Revenue & Income | Recurring Revenue | Revenue that repeats on a regular basis. |
| Revenue & Income | Deferred Revenue | Revenue not yet recognized as earned. |
| Revenue & Income | Earned Revenue | Revenue recognized when the applicable performance or earning criteria are satisfied. |
| Expenses | Expense | Cost incurred to operate a business or generate revenue. |
| Expenses | Operating Expense | Expense associated with normal business operations. |
| Expenses | Cost of Goods Sold (COGS) | Direct costs associated with goods or services sold. |
| Expenses | Direct Expense | Expense directly associated with producing a product or delivering a service. |
| Expenses | Indirect Expense | Expense not directly attributable to a particular product or service. |
| Expenses | Administrative Expense | Costs related to general business administration. |
| Expenses | Selling Expense | Costs associated with selling products or services. |
| Expenses | Payroll Expense | Cost of employee compensation and applicable employer payroll costs. |
| Expenses | Rent Expense | Cost of renting business premises or other assets. |
| Expenses | Utilities Expense | Cost of services such as electricity, water, internet, or similar utilities. |
| Expenses | Depreciation Expense | Periodic depreciation recognized for an asset. |
| Expenses | Interest Expense | Cost of borrowing money. |
| Expenses | Bad Debt Expense | Expense recognized for amounts expected to be uncollectible, under the applicable accounting method. |
| Accounts Receivable | Accounts Receivable (A/R) | Money owed by customers. |
| Accounts Receivable | Invoice | Document requesting payment from a customer. |
| Accounts Receivable | Outstanding Invoice | Invoice that has not yet been fully paid. |
| Accounts Receivable | Aging Report | Report showing how long receivables have been outstanding. |
| Accounts Receivable | Current Receivable | Amount not yet overdue according to payment terms. |
| Accounts Receivable | Overdue Invoice | Invoice that has passed its payment due date. |
| Accounts Receivable | Credit Memo | Document reducing the amount a customer owes. |
| Accounts Receivable | Customer Deposit | Money received from a customer before delivery of the related goods or services. |
| Accounts Receivable | Bad Debt | Receivable that is determined to be uncollectible. |
| Accounts Receivable | Collection | Process of obtaining payment from customers. |
| Accounts Receivable | Days Sales Outstanding (DSO) | Metric estimating the average number of days it takes to collect receivables. |
| Accounts Payable | Accounts Payable (A/P) | Money a business owes vendors and suppliers. |
| Accounts Payable | Vendor | Business or individual providing goods or services to a company. |
| Accounts Payable | Bill | Document received from a vendor requesting payment. |
| Accounts Payable | Purchase Order (PO) | Document authorizing a purchase from a vendor. |
| Accounts Payable | Vendor Credit | Credit issued by a vendor that reduces the amount owed. |
| Accounts Payable | Payment Terms | Conditions specifying when and how payment should be made. |
| Accounts Payable | Aging Report | Report showing outstanding vendor balances by age. |
| Accounts Payable | Accrued Payable | Amount owed for an expense incurred but not yet billed or paid. |
| Accounts Payable | Three-Way Match | Comparison of a purchase order, receiving record, and vendor invoice. |
| Accounts Payable | Vendor Reconciliation | Process of comparing vendor records with the company’s accounting records. |
| Bank & Account Reconciliation | Bank Reconciliation | Comparing accounting records with bank records to identify differences. |
| Bank & Account Reconciliation | Credit Card Reconciliation | Comparing recorded credit card transactions with the card statement. |
| Bank & Account Reconciliation | Reconciliation | Process of comparing two sets of financial records. |
| Bank & Account Reconciliation | Bank Statement | Record issued by a bank showing account activity. |
| Bank & Account Reconciliation | Outstanding Check | Check issued but not yet cleared by the bank. |
| Bank & Account Reconciliation | Deposit in Transit | Deposit recorded by the business but not yet reflected by the bank. |
| Bank & Account Reconciliation | Bank Fee | Fee charged by a financial institution. |
| Bank & Account Reconciliation | NSF | Non-sufficient funds; a payment may be rejected because sufficient funds are unavailable. |
| Bank & Account Reconciliation | Unreconciled Transaction | Transaction that has not yet been matched or explained during reconciliation. |
| Bank & Account Reconciliation | Cleared Transaction | Transaction that has been processed by the bank or financial institution. |
| General Ledger & Journal Entries | General Ledger | Central record containing financial account activity. |
| General Ledger & Journal Entries | Journal Entry | Accounting entry used to record a financial transaction or adjustment. |
| General Ledger & Journal Entries | Debit | One side of an accounting entry. |
| General Ledger & Journal Entries | Credit | The other side of an accounting entry. |
| General Ledger & Journal Entries | Journal | Record where transactions are initially recorded. |
| General Ledger & Journal Entries | Adjusting Entry | Entry made to update accounts before financial statements are finalized. |
| General Ledger & Journal Entries | Reversing Entry | Entry that reverses a previous accounting entry, often used in accrual accounting. |
| General Ledger & Journal Entries | Recurring Entry | Entry automatically or routinely recorded for similar transactions. |
| General Ledger & Journal Entries | Accrual Entry | Entry recognizing income or expense before the related cash transaction occurs. |
| General Ledger & Journal Entries | Closing Entry | Entry used to close temporary accounts at the end of an accounting period. |
| General Ledger & Journal Entries | Suspense Account | Temporary account used when the correct classification of a transaction is not yet determined. |
| General Ledger & Journal Entries | Control Account | General ledger account that summarizes detailed activity recorded in a subsidiary ledger. |
| Financial Statements | Financial Statements | Formal reports showing a company’s financial performance and position. |
| Financial Statements | Profit & Loss Statement (P&L) | Report showing revenue, expenses, and profit or loss. |
| Financial Statements | Income Statement | Another name commonly used for the Profit & Loss Statement. |
| Financial Statements | Balance Sheet | Statement showing assets, liabilities, and equity. |
| Financial Statements | Cash Flow Statement | Report showing cash inflows and outflows. |
| Financial Statements | Statement of Changes in Equity | Report showing changes in equity during a period. |
| Financial Statements | Notes to Financial Statements | Additional information explaining financial statement items and accounting policies. |
| Financial Statements | Comparative Financial Statements | Financial statements showing results for multiple periods. |
| Financial Statements | Consolidated Financial Statements | Statements presenting a parent company and its subsidiaries as one economic entity, when applicable. |
| Financial Analysis | Financial Analysis | Examination of financial information to understand business performance. |
| Financial Analysis | Financial Ratio | Metric used to evaluate financial performance or position. |
| Financial Analysis | Gross Profit Margin | Gross profit as a percentage of revenue. |
| Financial Analysis | Net Profit Margin | Net profit as a percentage of revenue. |
| Financial Analysis | Operating Margin | Operating income as a percentage of revenue. |
| Financial Analysis | Current Ratio | Current assets divided by current liabilities. |
| Financial Analysis | Quick Ratio | Measure of short-term liquidity using relatively liquid assets. |
| Financial Analysis | Return on Assets (ROA) | Measure of profitability relative to assets. |
| Financial Analysis | Return on Equity (ROE) | Measure of profitability relative to equity. |
| Financial Analysis | Debt-to-Equity Ratio | Measure comparing debt with equity. |
| Financial Analysis | EBITDA | Earnings before interest, taxes, depreciation, and amortization. |
| Financial Analysis | Working Capital | Current assets minus current liabilities. |
| Financial Analysis | Break-Even Point | Point at which total revenue equals total costs. |
| Cash Flow & Cash Management | Cash Flow | Movement of cash into and out of a business. |
| Cash Flow & Cash Management | Cash Inflow | Cash coming into the business. |
| Cash Flow & Cash Management | Cash Outflow | Cash leaving the business. |
| Cash Flow & Cash Management | Operating Cash Flow | Cash generated or used by normal business operations. |
| Cash Flow & Cash Management | Investing Cash Flow | Cash related to investments and long-term assets. |
| Cash Flow & Cash Management | Financing Cash Flow | Cash related to borrowing, repayment of debt, equity, and distributions. |
| Cash Flow & Cash Management | Free Cash Flow | Cash remaining after certain operating needs and capital expenditures, depending on the definition used. |
| Cash Flow & Cash Management | Cash Position | Amount of cash available to the business. |
| Cash Flow & Cash Management | Cash Forecast | Projection of expected future cash inflows and outflows. |
| Cash Flow & Cash Management | Cash Burn | Rate at which a business uses cash over a period, commonly used for startups. |
| Budgeting & Forecasting | Budget | Financial plan for a future period. |
| Budgeting & Forecasting | Forecast | Estimate of future financial performance based on available information. |
| Budgeting & Forecasting | Budget vs. Actual | Comparison between planned and actual financial results. |
| Budgeting & Forecasting | Variance | Difference between budgeted and actual results. |
| Budgeting & Forecasting | Favorable Variance | Variance generally considered beneficial to financial performance. |
| Budgeting & Forecasting | Unfavorable Variance | Variance generally considered unfavorable to financial performance. |
| Budgeting & Forecasting | Financial Projection | Estimate of future financial results. |
| Budgeting & Forecasting | Scenario Analysis | Analysis of possible outcomes under different assumptions. |
| Budgeting & Forecasting | Financial Model | Structured model used to analyze financial performance and future scenarios. |
| Budgeting & Forecasting | Rolling Forecast | Forecast that is continuously updated as new information becomes available. |
| Payroll Accounting | Payroll | Process of calculating and paying employee compensation. |
| Payroll Accounting | Gross Pay | Employee earnings before deductions. |
| Payroll Accounting | Net Pay | Amount paid to an employee after deductions. |
| Payroll Accounting | Payroll Tax | Tax associated with payroll under applicable laws. |
| Payroll Accounting | Employee Withholding | Amount withheld from employee pay for taxes and other authorized deductions. |
| Payroll Accounting | Employer Payroll Taxes | Payroll-related taxes paid by the employer. |
| Payroll Accounting | Wages | Compensation paid to employees. |
| Payroll Accounting | Salary | Fixed compensation generally paid on a regular basis. |
| Payroll Accounting | Benefits | Additional compensation or benefits provided to employees. |
| Payroll Accounting | Payroll Register | Detailed report of payroll information for employees. |
| Payroll Accounting | Payroll Reconciliation | Comparing payroll records with accounting and payroll reports. |
| Tax Accounting & Tax Preparation | Tax Return | Document filed with a tax authority reporting income, deductions, credits, and tax information. |
| Tax Accounting & Tax Preparation | Taxable Income | Income subject to tax under applicable rules. |
| Tax Accounting & Tax Preparation | Tax Deduction | Amount that reduces taxable income, subject to applicable rules. |
| Tax Accounting & Tax Preparation | Tax Credit | Amount that directly reduces tax liability, subject to applicable rules. |
| Tax Accounting & Tax Preparation | Tax Liability | Amount of tax owed. |
| Tax Accounting & Tax Preparation | Estimated Tax | Tax estimated to be owed for a period and potentially paid in installments. |
| Tax Accounting & Tax Preparation | Tax Basis | Amount used to determine certain tax consequences, such as gain or loss. |
| Tax Accounting & Tax Preparation | Tax Depreciation | Depreciation calculated under applicable tax rules. |
| Tax Accounting & Tax Preparation | Sales Tax | Tax imposed on certain taxable sales or services under applicable jurisdictional rules. |
| Tax Accounting & Tax Preparation | Payroll Tax | Taxes associated with wages and payroll under applicable laws. |
| Tax Accounting & Tax Preparation | Tax Compliance | Meeting applicable tax filing, payment, and reporting requirements. |
| Tax Accounting & Tax Preparation | Tax Preparation | Process of compiling financial and tax information to prepare a tax return. |
| Month-End & Year-End Accounting | Month-End Close | Process of finalizing accounting records for a month. |
| Month-End & Year-End Accounting | Year-End Close | Process of finalizing accounting records for the fiscal year. |
| Month-End & Year-End Accounting | Closing Checklist | List of tasks required to complete an accounting close. |
| Month-End & Year-End Accounting | Cut-Off | Process of ensuring transactions are recorded in the correct accounting period. |
| Month-End & Year-End Accounting | Accrual | Recognition of revenue or expense before the related cash transaction occurs. |
| Month-End & Year-End Accounting | Prepayment | Payment made before the related goods or services are received. |
| Month-End & Year-End Accounting | Adjusting Journal Entry | Entry made to update accounts before financial statements are finalized. |
| Month-End & Year-End Accounting | Reconciliation | Comparison of records to verify accuracy. |
| Month-End & Year-End Accounting | Review | Examination of accounting records for accuracy and unusual activity. |
| Month-End & Year-End Accounting | Close Process | Set of procedures used to finalize financial records for a reporting period. |
| Accounting Cleanup | Bookkeeping Cleanup | Process of correcting and organizing incomplete or inaccurate accounting records. |
| Accounting Cleanup | Historical Cleanup | Reviewing and correcting records from previous accounting periods. |
| Accounting Cleanup | Uncategorized Transaction | Transaction that has not been assigned to an appropriate account. |
| Accounting Cleanup | Duplicate Transaction | Transaction recorded more than once. |
| Accounting Cleanup | Negative Balance | Balance below zero in an account where that may indicate an error or unusual activity. |
| Accounting Cleanup | Old Outstanding Transaction | Transaction that remains unresolved for an extended period. |
| Accounting Cleanup | Suspense Balance | Amount temporarily held because its proper classification is unclear. |
| Accounting Cleanup | Data Correction | Process of fixing inaccurate accounting information. |
| Accounting Cleanup | Account Reclassification | Moving an amount from one account to another appropriate account. |
| Accounting Cleanup | Catch-Up Bookkeeping | Updating books that have fallen behind. |
| Audit & Internal Controls | Audit | Independent examination of financial information or records, depending on the engagement. |
| Audit & Internal Controls | Internal Audit | Review performed within or for an organization to evaluate controls, risks, and processes. |
| Audit & Internal Controls | Internal Control | Process designed to help safeguard assets, maintain reliable records, and support compliance. |
| Audit & Internal Controls | Segregation of Duties | Separating responsibilities among individuals to reduce the risk of errors or fraud. |
| Audit & Internal Controls | Audit Trail | Record showing the history of transactions and changes. |
| Audit & Internal Controls | Supporting Documentation | Documents supporting an accounting transaction. |
| Audit & Internal Controls | Materiality | Significance of an item or error in relation to financial information. |
| Audit & Internal Controls | Compliance | Following applicable laws, regulations, policies, and standards. |
| Audit & Internal Controls | Fraud | Intentional deception for financial or other benefit. |
| Audit & Internal Controls | Risk Assessment | Process of identifying and evaluating potential risks. |
| Accounting Software & Technology | Cloud Accounting | Accounting software accessed through the internet. |
| Accounting Software & Technology | Accounting Software | Software used to record, manage, and report financial information. |
| Accounting Software & Technology | Bank Feed | Automated connection importing transactions from a financial institution. |
| Accounting Software & Technology | Automation | Use of technology to perform repetitive tasks with limited manual intervention. |
| Accounting Software & Technology | Data Migration | Moving accounting data from one system to another. |
| Accounting Software & Technology | Integration | Connecting different software systems so they can exchange data. |
| Accounting Software & Technology | API | Technology that allows different software applications to communicate. |
| Accounting Software & Technology | OCR | Technology that converts text from images or documents into machine-readable data. |
| Accounting Software & Technology | Digital Accounting | Use of digital tools and technology to manage accounting processes. |
| Accounting Software & Technology | Workflow Automation | Automating a series of connected accounting or business processes. |
| Finance & Business Terms | Finance | Management of money, investments, funding, and financial resources. |
| Finance & Business Terms | Financial Planning | Planning how financial resources will be managed to achieve business objectives. |
| Finance & Business Terms | Capital | Financial resources available to a business. |
| Finance & Business Terms | Working Capital | Current assets minus current liabilities. |
| Finance & Business Terms | Liquidity | Ability to meet short-term financial obligations. |
| Finance & Business Terms | Solvency | Ability to meet long-term financial obligations. |
| Finance & Business Terms | Profitability | Ability of a business to generate profit. |
| Finance & Business Terms | Leverage | Use of debt or other financial resources to potentially increase returns and risk. |
| Finance & Business Terms | Return on Investment (ROI) | Measure of return relative to the investment made. |
| Finance & Business Terms | Cost of Capital | Cost associated with obtaining funds for a business. |
| Finance & Business Terms | Capital Structure | Mix of debt and equity used to finance a business. |
| Business Analytics & KPIs | KPI | Key Performance Indicator used to measure performance against an objective. |
| Business Analytics & KPIs | Dashboard | Visual display of important financial or operational information. |
| Business Analytics & KPIs | Data Analytics | Process of examining data to identify patterns and insights. |
| Business Analytics & KPIs | Financial Analytics | Analysis of financial information to support business decisions. |
| Business Analytics & KPIs | Descriptive Analytics | Analysis explaining what happened. |
| Business Analytics & KPIs | Diagnostic Analytics | Analysis examining why something happened. |
| Business Analytics & KPIs | Predictive Analytics | Analysis estimating what may happen in the future. |
| Business Analytics & KPIs | Prescriptive Analytics | Analysis suggesting potential actions based on data. |
| Business Analytics & KPIs | Business Intelligence (BI) | Technology and processes used to analyze business data and support decisions. |
| Business Analytics & KPIs | Data Visualization | Presenting data through charts, graphs, and other visual formats. |
| Business Analytics & KPIs | Trend Analysis | Examination of financial or business trends over time. |
| Business Analytics & KPIs | Benchmarking | Comparing performance against a standard, competitor, or industry reference. |