Category: Accounting Terms

The accounting profession has a code of ethics that provides guidance to accountants on how they should conduct themselves in the workplace. The accou…

An accounting information system (AIS) is a structure that a business uses to collect, store, manage, process, and report its financial data. The acco…

There are two main types of accounting research: primary research and secondary research. Primary research involves collecting original data through s…

Activity-based costing (ABC) is a costing method that assigns costs to activities rather than products. This accounting technique can be used to better …

The Big Four accounting firms are the world’s largest professional accounting and auditing organizations. The term “Big Four” accounting firms refers to…

A bond is a debt security, in which the issuer owes the holders a debt and is obliged to pay them interest (coupons) or to repay the principal at a late…

Bookkeeping is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business de…

A capital expenditure is an outlay of cash by a company for the purposes of acquiring, improving, or maintaining long-term assets. These assets may incl…

In accounting, cash-basis accounting is a method of recording revenue and expenses only when payment is received or made. This means that revenues and e…

A Certified General Accountant (CGA) is a professional designation earned after completing specific coursework and exams in accounting. A CGA can provid…

Certified Management Accountants (CMAs) are accounting professionals who have met rigorous education and experience requirements and have passed a Unifo…

A certified public accountant (CPA) is a professional accounting designation given to those who have completed the necessary education and examinations….

The chart of accounts is a listing of all the account titles that a company has identified and made available for recording transactions in its accounti…

A chartered accountant (CA) is a professional accounting designation given to accounting professionals in many countries around the world. In order to b…

Comprehensive income is a term used in accounting to refer to the total amount of a company’s income. This includes both operational and non-operational…

Construction accounting is a type of accounting that specifically deals with the financial aspects of construction projects. This includes keeping track…

The convention of conservatism is an accounting principle that requires accountants to err on the side of caution when recording estimates and assumptio…

The convention of disclosure is an accounting convention that requires companies to provide full and accurate disclosure of their financial position, pe…

Cost accounting is the accounting process that tracks, records, and analyzes the costs associated with a company’s products or services. This informatio…

Creative accounting is a term that is used to describe accounting practices that may be considered aggressive or unconventional. These practices can be …

In accounting, credit refers to an accounting entry that increases a liability or equity account, or decreases an asset or expense account. A credit is …

A credit note is a document that is issued by a seller to a buyer. This document indicates that the buyer has been overcharged for goods or services. Th…

A debit note is an accounting document that is used to request a credit from a supplier. This type of accounting document is typically used when goods a…

Debitcapital refers to accounting entries that record increases in liabilities, expenses, and losses, or decreases in assets, equity, income, and gains….

A deficit is an accounting term that refers to the amount by which a company’s liabilities exceed its assets. In other words, a deficit occurs when a co…

Depreciation is an accounting method of allocating such cost to expense in a systematic and rational manner to those accounting periods in which the org…

Diluted earnings per share (diluted EPS) is a measure of the profit attributable to each ordinary share that would be paid if all convertible securities…

The double-entry bookkeeping system is a method of accounting that records transactions as both debits and credits. In other words, for each transaction…

In accounting, the dual aspect refers to the double-sided nature of every transaction. Every business transaction has two parts, and each part affects b…

E-accounting is the accounting process that uses electronic means to collect, store, and report financial data. This includes the use of computer hardwa…

Earnings per share (EPS) is a key metric used by investors to determine the profitability of a company. EPS is calculated by dividing a company’s net in…

EBIT is an accounting term that stands for “earnings before interest and taxes.” It is a measure of a company’s profitability that excludes interest and…

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It is a measure of a company’s operating performance. EBITDA is often…

An engagement letter is a formal document that outlines the terms of a business agreement. It typically includes an overview of the work to be performed…

The accounting entity concept is the idea that a business is a separate and distinct entity from its owners. This means that the business has its own fi…

Environmental accounting is the process of accounting for the environmental costs and benefits of an organization’s activities. This can include measuri…

An expense is an accounting term for a cost that has been incurred by a business. An expense represents a decrease in the company’s assets or an increas…

Financial accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making bu…

An accounting and financial audit is an independent examination of an organization’s financial statements and accompanying disclosures. The purpose of t…

Fixed assets are long-term physical assets that a company uses in its business. They are also known as capital assets or property, plant, and equipment …