He is the sole author of all the materials on accountingcoach. Browse the list of 18 867 accounting abbreviations with their meanings and definitions. A book with the policies, procedures, standards, and guidelines for the accountants of an individual proprietorship or company. Common accounting terminology glossary alphabetical order account an account is a record used to properly classify the activity recorded in the general ledger. Accounting definitions and basic accounting terms to know as a small business owner. Accountants use terminology foreign to many outside of this profession. Mel king institute definitions of accounting terms for financial statements for cdcs 1. Dont feel left out in conversations and dont be left behind because you arent sure what someone is talking about. Accounting period any period of time utilised to measure accounting performance e. Common accounting terminology glossary alphabetical order.
An act designed to improve quality and transparency in financial reporting and independent audits and accounting services for public companies, to create a public company accounting oversight board, to enhance the standardsetting process for accounting practices, to strengthen the independence of firms that audit public companies, to increase. The firms that agree to merge are roughly equal in terms of size, customers, scale of operations. Weve compiled a list of the 42 most common accounting terms, along with their abbreviations where appropriate and definitions. Once you become familiar with some of these terms and concepts, you will feel comfortable navigating through the explanations, quizzes, puzzles.
Exposure draft accounting guideline on merger accounting comments to be received by 31 may 2005 issued by the council, hong kong institute of certified public accountants the hong kong institute of certified public accountants council council has issued for consultation an exposure draft of proposed accounting guideline on merger. Accounting definitions basic accounting terms to know. Accounting meaning, definition and basic of accounting systems. An area of public accounting ranging from development of accounting and computer systems to support services for marketing projects and merger and acquisition activities. Browse and search thousands of accounting abbreviations and acronyms in our comprehensive reference resource. Accounting pooling of interests a marriage of two companies. It includes not only the maintenance of accounting records but also the preparation of financial and economic related. Basic accounting terms accounting terminology letstute. Account balance an account balance is the sum of debit entries minus the sum of credit entries in an account. Entering into the accounting field can be a little confusing at first with all of the new terminology to learn. Even though you may be familiar with some of them, it is important to know their exact meanings otherwise you may find yourself becoming confused.
Accounts payable is an account within the general ledger representing. Acquisitions as you can see, an acquisition may be only slightly different from a merger. Learn vocabulary, terms, and more with flashcards, games, and other study tools. The tax terms are the same as those of a purchase merger. The nysscpa has prepared a glossary of accounting terms for accountants and. For example, you may hear the terms revenues and receipts used interchangeably in casual office conversation. The alphabetical layout will help you easily find the word you need. Terminology and definitions accounting this manual begins by defining the basic terms used in accounting functions. Articles business list of key accounting terms and definitions list of key accounting terms and definitions 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. Check out the accounting terms below and find out what that last conversation was about.
This record is called an account for example, since cash appears on the all balance sheets, a separate record is kept of the increases and decreases in cash likewise, a separate record is kept of the increases and decreases for supplies, equipment. Harold averkamp cpa, mba has worked as a university accounting instructor, accountant, and consultant for more than 25 years. Accounting returns studies involve the anal ysis of the accounting performance of the joint entity measured in terms of return on assets or return on equity. Exposure draft accounting guideline on merger accounting. A merger is the combination of two companies into one by either closing the old entities into one new entity or by one company absorbing the other. Mel king institute definitions of accounting terms for. A systematic way of recording and reporting financial transactions for a business or organization. Discover the meaning of common bookkeeping terms, words and phrases from this quick a z style guide. The following 86 pages are in this category, out of 86 total.
Financial statements records that outline the financial activities of a business, an individual or any other entity. Lets learn some accounting basic terms basic accounting. It is most often used by sole proprietorships and small businesses that dont maintain inventory. In many cases, a preferred means of managing a business combination might be acquiring a controlling amount of stock. Understanding the terminology will help you understand the concepts and their relevance to you, and more importantly, they will help you analyze and run your small business. Study define the following financial statements in accounting terms flashcards flashcards at proprofs the following flashcards are the basics of accounting. Accounts payable sundry creditors short term or current financial obligations that are created through the purchase of merchandise, or obtaining of service. Plain language definitions with sample applications. It is separate from the entitys owners and their financial transactions. If you sell the asset, you subtract your basis, also known as your cost basis, from the selling price to determine your capital gain or capital loss.
The equation that is the basis of the balance sheet. All of the following accounting terms have precise definitions when used in business. Consolidated financial statements financial statements of a group in which assets, liabilities, equity, income, expenses and cash flows of the parent company and its. As a result, many transactions qualified as business combinations when they. Goodwill is an intangible asset that accounts for the excess purchase. If positive, the difference is called a debit balance. Clarification of some accounting terms abbreviations and acronyms for a complete glossary of terms and definitions see textbook pp. Cash basis accounting is a simple method of keeping track of revenue and expensesrevenue is recorded when the customer makes payment and expenses are recorded when paid out. But stakeholders told the fasb that the definition of a business in topic 805, business combinations, is applied too broadly. Ifrs 3 business combinations is about accounting at a time when the acquirer successfully acquires control of a particular business for example, merger or acquisition. Accounting systems are designed to show the increases and decreases in each part of the above accounting basic equation in a separate record. Knowing accounting terminology will make bookkeeping easier. In a pooling of interests, two entities merge through an exchange of.
An organization created with the objective of making a profit from the sale of goods or services. As a reallife example, consider the tmobile and sprint merger. Chapter 1 part one identifying accounting terms 22 terms. Tax on the value of a decendents taxable estate, typically defined as the. Fasb clarifies definition of a business under gaap. Related party transactions a term used to define the close relationship between individuals who have entered into or executed a contract. Chartstring what is typically called an account or thought of by most people as an account is called a chartstring in peoplesoft ps.
Accounting there are two types of accounting treatment as disconnected from tax treatment the desired treatment is pooling of interests add up the balance sheets of the two companies at historical cost assets, liabilities, other equity glossary. Bookkeeping terms and basic accounting definitions. Hello friends, this session will help you to understand the basic accounting terminology basic accounting terms in a very easy language. The current definition of a business under us gaap affects such areas of accounting as acquisitions, disposals, goodwill, and consolidation.
All the information you need to run a successful small business is contained. Understanding the financial condition of the business and the accounting principles used to determine the financial condition is critical for business owners. Accounting is the analysis and interpretation of bookkeeping records. It is these kinds of business combinations that are. Accounting terminology guide over 1,000 accounting and. Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these.
A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. Just because you passed an audit, it does not mean that your company is in good. Sometimes used with a stronger meaning of understating assets and. Preferred bidder is the bidder who is selected by the vendor, usually to some predetermined criteria, as being the party to whom it intends to sell the business, or award a contract, subject to the completion of negotiations and legal arrangements. If the customer has credit terms, the revenue is not recorded until full payment is.
In other words, two or more companies are consolidated into one company. Understanding the meaning behind basic accounting terms opens the communication between accountants and business. List of all most popular abbreviated accounting terms defined. Basis is the total cost of buying an investment or other asset, including the price, commissions, and other charges. Introduction to accounting basics this explanation of accounting basics will introduce you to some basic accounting principles, accounting concepts, and accounting terminology. My accounting course accounting and business dictionary explains 1,000s of accounting terms in plain english. Define the following financial statements in accounting. This list may not reflect recent changes learn more.
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