If you want to start a business, get better at running your business, or get an accounting job, you need to know some essential financial accounting terms and concepts. Glossary of cost accounting terms established in sffas 4. The following is a glossary of words and phrases crucial to the accounting profession. It usually means the allocation of costs of intangible assets to the periods that benefit from these assets. A service that oversees, measures, and evaluates financial information for decision making purposes. Ap days is the average days that a company or plant. Plain language definitions with sample applications. Consolidated financial statements financial statements of a group in which assets, liabilities, equity, income, expenses and cash flows of the parent company and its. Decentralized management allows great freedom for decision making at the level of the separate units. Internal managers, rather than auditors, use cost accounting most of the time to identify aspects of their company where costs can be cut. Management accounting reporting designed to assist management in decisionmaking, planning, and control. Accounting terminology can be quite a mouthful and hard to remember, especially if you dont have much prior experience with financial or management accounting.
The systematic reduction of an asset, specifically when referring to a longlived intangible asset such as goodwill or intellectual property. Return on assets the relationship between net profit and total assets. With accurate financial records, the equation balances. Investorwords the most comprehensive investing glossary on the web. A number of factors must be considered when setting up a management accounting system and the management style and structure of an organisation will affect the system which it creates.
Management accounting financial definition of management. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The wealthhow article below provides a glossary of accounting terms and. Statement of change in owners equity financial statement of a business that reports the changes that have occurred in the owners equity. Established in sffas 4, managerial cost accounting. Accounting principles this chapter defines debt concepts relating to the pub lic sector, and discusses core accounting principles in the compilation of public sector debt statistics. The job of ceo is sometimes combined with others, such as that of president clock v clock inon phr v i to record on a special card or computer the time you arrive at or begin work clock offout phr v i to record on a special card or computer the time you stop or leave work. Terminology and definitions accounting this manual begins by defining the basic terms used in accounting functions. Thus, more emphasis is placed on higher dollar value items as than on lesser dollar value items bs, while the least important items cs receive the least time and attention. Cost accounting a branch of accounting that observes and calculates the actual costs of a companys operations. The wealthhow article below provides a glossary of accounting terms and definitions that are most commonlyused. Fais public utility finance and accounting seminars seminars for professionals concerned with electric, gas and water companies financial accounting institute p.
Mel king institute definitions of accounting terms for. We can use this language to communicate financial transactions and their results. In doing my part to help advance our profession, im introducing a new management accounting framework that describes the full spectrum of skills that should be espoused by management. Corporations currently operate on a fiscal year beginning on july 1st and ending june 30th. Cost a financial measure of the resources used or given up to achieve a.
Bookkeeping and accountancy deal with maintaining record of all the transactions that a businessindividual makes. Terms like revenue, expenses, gross profit, depreciation, bad debt, and fixed assets have precise definitions when used in business accounting. Please find a simple glossary of accounting terms we use. Phone 2015680249 glossary of utility finance and accounting terms used in our seminars. The accounting concepts, measurement techniques, and standards of presentation used in financial statements.
A branch of accounting that observes and calculates the actual costs of a companys operations. Managerial accounting midterm cheat sheet accounting jobs. In addition to recording financial transactions, it involves reporting, analyzing and summarizing information. In the beginning it can act as a plan and in the end it can act as control to measure performance against so that future plans can be improved. Abc method inventory management method that categorizes items in terms of importance. Accounting software is software that does various accounting and bookkeeping tasks. Affiliated company company, or other organization related through common ownership, common control of management or owners, or through. Check out these basic accounting terms and start to commit them to memory. In management accounting, a measurement in monetary terms, of the amount of resources used for some purpose. Management accounting simple english wikipedia, the free. Harold averkamp cpa, mba has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Reasonable management salaries are the salaries that management believes are reasonable to be paid if external persons were to be appointed to management positions in the organisation. Shortterm interestearning financial instruments that are deemed to be highly.
Usually an adjective implying the amount of an asset or liability measured in days of sales, e. Over 18000 financial and investing definitions, with links between related terms. Accounting terminology guide over 1,000 accounting and finance terms. General accounting terms and definitions accounting cycle composed of several accounting periods spanning over twelve consecutive months. Glossary of accounting terms and definitions wealth how. The accounting guideline that permits the violation of another accounting guideline if the amount is insignificant. Goingconcern assumption an assumption by accountants that a business will continue to operate indefinitely unless specific evidence to the contrary exists, for example, impending backruptcy. Accounting accounting keeps track of the financial records of a business. Liabilities are amounts owed by a business at any one time. Accounting concepts accounting concepts are the principles that guide the preparation of accounting information.
Basic accounting terms, acronyms, abbreviations and concepts to remember. Short run the time during which a companys management cannot change the effects of certain past decisions. Though its by no means a definitive list, it covers many of the basics youll need to start or refresh. To successfully manage a companys bookkeeping or accounting, knowledge of terminology is a must. Bilingual glossary of accounting terms paperback december 29, 2011. Glossary of business management terms the balance careers. The world of accounting uses many terms to define different actions, circumstances and classifications for preparing financial statements with the most accurate information possible. Accounting activities related to orderly recordkeeping of financial information recording daily transactions preparing financial statements.
Accounting classes accounting basics accounting student accounting principles bookkeeping and accounting bookkeeping business accounting and finance accounting notes business accounting there are many types of invoice that a business uses, the list includes pro forma invoice, interim invoice, creditdebit invoice, receipts, bills, etc. In management accounting the period may be as frequent as the management chooses weekly, monthly, quarterly and annual reporting are all used. My accounting dictionary is written completely in everyday, nonaccounting language, so you can understand it. The nysscpa has prepared a glossary of accounting terms for accountants and journalists who report on and interpret financial information. The following is a list of common nonprofit accounting terminology. The nysscpa has prepared a glossary of accounting terms for accountants and. Ppm an accounting term used to describe a division, business. A record that holds the results of financial transactions. Management collective term for those persons responsible for the. Information is an important part of any such system and the study unit will go on to. For example, a manager may enlist a cost accountant to determine the most expensive aspects of hisher. Oct 31, 2014 accounting classes accounting basics accounting student accounting principles bookkeeping and accounting bookkeeping business accounting and finance accounting notes business accounting there are many types of invoice that a business uses, the list includes pro forma invoice, interim invoice, creditdebit invoice, receipts, bills, etc.
Financial statements records that outline the financial activities of a business, an individual or any other entity. See all 3 formats and editions hide other formats and editions. Using this definition, accounting can be seen to be about the identification and recording of business transactions as a way of assisting the management and planning of a business. Alternative costing method for strategic management. Most modern accounting software is always connected to the internet. Accounting equation the relationship between assets, liabilities and. Accounting terminology guide over 1,000 accounting and. A term in total quality management that implies the degree to which customers are pleased with a product or service. You need to understand exactly what is meant by accounting terms like these. Asset management a service from a financial adviser to spread a persons investment between a number of assets, such as shares, government bonds, cash and property, so that they can potentially earn more money asset management insurance cover for an event such as death, rather than an event that might happen, such as fire or theft atm. It stores a business financial data, and is often used to perform business transactions. They can be expressed as payables for accounting purposes. Included in liabilities are loans, credit payments due, taxes, or any other form of debt in which you are obligated to pay.
A formal statement of managements expectations of sales, expenses, volume, and other financial. Accounting glossary center for nonprofit excellence. Accounting terms entering into the accounting field can be a little confusing at first with all of the new terminology to learn. The institute of management accountants ima recently updated its definition as follows. Basic accounting concepts n matching n revenues and expenses shown on the income statement must be matched for the period. He is the sole author of all the materials on accountingcoach. Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to aid managers decision making process in achieving business goals. Management accounting is first and foremost about managing internal operations to optimize organizational performance. Chartstring what is typically called an account or thought of by most people as an account is called a chartstring in peoplesoft ps. This accounting glossary isnt an ordinary dictionary that you find in the back of one of your accounting textbooks. As cloud accounting providers, we feel strongly about eliminating jargon and making accounting simple and accessible for everyone. Chapter 2 accounting and accounting information accounting. This manual begins by defining the basic terms used in accounting functions.
Accounting period expenditure and revenue measurement within a predetermined time frame. Nonprofit accounting terminology posted on wednesday, november 04, 2015 share. Dont feel left out in conversations and dont be left behind because you arent sure what someone is talking about. List of key accounting terms and definitions investorguide.
Glossary of financial accounting terms pearson education. Consolidated financial statements financial statements of a group in which assets, liabilities. In other words, it is the act of making sense of financial and costing data and translating that data into. A debenture is the safest form of share and is usually tied to an asset. A formal statement of managements expectations of sales, expenses, volume, and other financial transactions of an organization.
The equation that is the basis of the balance sheet. Administrative costs costs of managing the organization, including the costs of top administrative functions and various staff departments such as accounting, data processing, and personnel. Accounting is a comprehensive system to collect, analyze, and communicate financial information. In this spirit, weve compiled this handy guide to the most commonly used accounting terms for your reference.
Mel king institute definitions of accounting terms for financial statements for cdcs 1. Accounting the systematic recording, reporting, and analysis of financial transactions. In the short run, many costs are assumed to be fixed and unchangeable. That is why i created the my accounting course accounting term dictionary.