Bookkeeping Glossary 2018
We are trying to build one of the best bookkeeping glossaries on the web, updated for 2018.
Browse through our list of bookkeeping terms below. Have we missed an important term that you think should be included? Get in touch.
Money that is owed to suppliers/creditors for expenses such as overhead or inventory purchasing, shown as a liability on a balance sheet.
Money owed to a company by outside organisations that is listed on a company balance sheet.
Assets are items of value owned by a business. Asset can be found on a balance sheet and include everything from cash to equipment, land and buildings owned.
An audit is a detailed analysis of an organisation’s financial records by a third party.
A financial document listing the assets owned by a business, liabilities owing by the business, and owners equity. A balance sheet represents a single point in time.
Bookkeeping is the process of keeping financial records as part of an accounting process.
A budget is a financial document that is designed to project future income and expenses for an organisation.
Capital is the value of investment in a business by the owners. Capital is the part of the business which belongs to the owner; which is why it is often reffered to as the owner’s interest.
Capital gain is money accrued from the sale of fixed assets such as property, or even entire businesses if profit was made on the sale.
Cash flow describes the movement of money within an organisation.
Collateral is something of value offered as security when taking out a loan.
Cost of Goods Sold
Costs that are attributed to the cost of production of goods. These can be direct costs, such as the purchase of products or components from a wholesaler, or indirect costs such as the labour involved.
A credit is a person or organisation who is owed money by another business.
One of the fundamentals of double entry accounting. A credit is a number that would be on the right side of a T-account, that can either increase or decrease the value of the balance depending on the account.
One of the fundamentals of double entry accounting. A credit is a number that would be on the left side of a T-account, that can either increase or decrease the value of the balance depending on the account.
A default represents the failure to meet the deadline of a loan/credit.
Depreciation is an accounting method that is used to track the value of an item over a period of time.
Dividends are payments made by a company to its shareholders, often in the form of a distribution of profits.
GST is an end-user or consumer tax paid on most goods and services in Australia.
Liabilities are the debts owed by an organisation. The main types of liabilities are those owed to creditors, as well as overdrafts and lending (loans).
Xero is a New Zealand based maker of online accounting/bookkeeping software popular with small and medium sized businesses.
Last updated: 13th June 2018
Sources: Some definitions were adopted from this bookkeeping glossary.