Accounting:
Accounting terminologies are terms and phrases used in the accounting sector. They are used to define many accounting features such as financial statements, accounting principles, and accounting processes.
- Account: A record of financial transactions related to a specific asset, liability, equity, revenue, or expense.
- Accounting equation: The basic accounting rule that says assets equal liabilities plus equity is as follows: Liabilities plus Equity equals Assets.
- Accounts Payable (AP): Amounts due to suppliers or vendors by a corporation for products or services obtained but not yet paid for.
- Accounts Receivable (AR): Amounts owing to a corporation by its clients for products or services purchased on credit.
- Accrual Accounting: A style of accounting that records income and costs as they are generated or spent, regardless of actual cash inflow or outflow.
- Accrued expense: An amount that has been spent but not yet reimbursed. For instance, the cost of the office supplies would be an accumulated expense at the end of November if a business uses them all up in November but doesn’t pay for them until December.
- Accrued revenue: Earned revenue that has not yet been received. For instance, the amount of a transaction made in November would be considered accrued revenue at the end of the month if the business sells products or services but does not get payment until December.
- Assets: Cash, inventory, property, and equipment are examples of assets possessed by a corporation that have economic worth.
- Auditing: Examining financial records, transactions, and statements to verify correctness, compliance, and dependability.
- Balance Sheet: A financial statement that depicts a company’s assets, liabilities, and equity at a certain period in time.
- Book value: The asset’s worth as shown on the balance sheet of a business.
- Cash Flow Statement: A financial statement that sums up the cash inflows and outflows from operating, investing, and financing operations.
- Cost of goods sold (COGS): The out-of-pocket expenses related to creating or purchasing commodities or services. The cost of overhead, labor, and materials is included in COGS.
- Credit: An entry that increases an asset or decreases a liability or equity account.
- Debit: An entry that decreases an asset or increases a liability or equity account.
- Depreciation: The systematic distribution of the cost of a long-term asset throughout its useful life to reflect its steady wear and tear or obsolescence.
- Equity: The remaining stake in a company’s assets after removing obligations. It indicates the ownership of the firm by the shareholders.
- Expenses: Salaries, rent, utilities, and raw materials are examples of costs incurred by a corporation in the usual course of business.
- General Ledger: The central repository that organizes and records all of a company’s financial transactions.
- Income Statement: The profit and loss statement, often known as the income statement, illustrates the company’s sales, costs, and net gain or loss for a certain period.
- Journal entry: A record of a financial transaction that shows the accounts affected and the amounts involved.
- Liabilities: Loans, accounts payable, and accumulated costs are examples of obligations or debts due by a firm to third parties.
- Net income: The amount of money a business makes over a specific period of time. entire revenues less entire costs equals net income.
- Revenue: Profit from the selling of products or services to clients.
- Trial Balance: To guarantee that debits and credits are equal, a summary of all general ledger account balances is provided.
** These are only a few accounting terminology; the accounting discipline contains many more concepts and phrases.
Finance:
Finance is a large topic, and there are several terminology used in the sector. Here are some of the most commonly used financial terms:
- Amortization: Spreading the cost of an intangible asset or loan out over its anticipated useful life.
- Bond: A debt instrument issued to raise money by a corporation or government organization, having set interest payments and a defined maturity date.
- Capital Expenditure (Capex): Amounts spent by a corporation to purchase, enhance, or maintain tangible assets such as real estate, machinery, or equipment.
- Capital Gains: The amount of money made when selling a stock or piece of real estate.
- Capital: Financial resources or finances used to establish, run, or expand a firm.
- Debt: Money due to a lender or creditor by an individual or corporation.
- Diversification: The process of spreading risk by investment in a range of assets.
- Dividend: A return on investment made by distributing a percentage of a company’s earnings to its shareholders.
- Equity: The ownership share or remaining claim to a company’s assets following the elimination of liabilities.
- Financial Statement: A report that outlines a company’s financial activity and status, such as the income statement, balance sheet, and cash flow statement.
- Hedge Fund: An investment fund that combines cash from high-net-worth individuals and institutional investors in order to pursue a variety of investing strategies, sometimes with higher risk and possible profits.
- Interest: The interest rate on a loan or the rate of return on an investment.
- Liquidity: The ease with which an asset may be turned into cash without significantly affecting its price..
- Loss: Profit is the reverse of a loss. It happens when spending is greater than income.
- Market Capitalization: The total worth of a company’s outstanding stock shares, computed by multiplying the current market price per share by the number of outstanding shares.
- Profit: Profit is the difference between revenue and expenses. It is also known as net income.
- Return on Investment (ROI): A measure of an investment’s profitability derived by dividing the gain or profit from the investment by its starting cost.
- Risk: The risk of loss or uncertainty linked with a financial choice or investment.
- Stock Market: A marketplace where buyers and sellers trade publicly traded company shares.
** These are just a few examples of financial terminologies, and the field of finance encompasses many more concepts and terms.