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Accounting & Finance Glossary

Understanding accounting and finance terminology can be complex. Our glossary simplifies these concepts with clear definitions to help you navigate financial language with confidence.

B

Bad Debt Expense

Balance sheet

Balance Sheet Analysis

Balanced Scorecard

Bank Reconciliation

Bonds Payable

Bookkeeping Basics

Break-even Analysis

Budgeting

Buildings

D

Days Sales Outstanding

Debt service coverage ratio

Debt to equity ratio

Deferred Revenue

Deferred Tax Asset

Deferred Tax Liability

Depreciable Assets

Depreciation expense

Depreciation formula

Depreciation Methods

Detection risk

Direct Costs

Direct vs Indirect Expenses

Disclaimer of opinion

Dividend Payout Ratio

Dividend Yield

Dividends

Double Entry Bookkeeping

E

Earnings Per Share (EPS)

Economic Entity Assumption

Effective Tax Rate

Efficiency ratios

Entity Concept

Equipment

Equity Method

Expenditure

External Audit

F

Fair Value Accounting

FIFO Method

Financial Accounting Standards Board (FASB)

Financial Ratios

Fixed Assets

Fixed Costs

Flexible Budget

Forecast

Full disclosure principle

G

General Ledger

Generally Accepted Accounting Principles (GAAP)

Going Concern Principle

Goodwill Accounting

Gross Margin

Gross profit margin

Gross Profit vs Net Profit

Gross vs Net Sales

H

Historical Cost Principle

Horizontal Analysis

I

Income Statement

Indirect Cash Flow Method

Indirect Costs

Inherent Risk

Installment Method

Intangible Assets

Interest

Interest Expense Calculation

Interim Financial Statements

Internal Audit

International Financial Reporting Standards (IFRS)

Inventory

Inventory Days

Inventory Shrinkage

Inventory Turnover

J

Job Order Costing

Journal Entry

L

Land

Ledger Balance

Letter of Credit

LIFO Method

Liquid Assets

Liquidity ratios

Long term liabilities

Long-term Assets

Lower of Cost or Market

M

Make-or-Buy Decision

Managerial Accounting

Marginal Costing

Marginal Tax Rate

Marketable Securities

Master Budget

Matching Principle

Materiality

Materiality Examples

Materiality Principle

MBA Terminology

Merger

Monetary unit assumption

Mortgage Payable

N

Net Operating Income

Net Profit Margin

Net Worth

Non operating expenses

Non operating income

Non operating revenue

Non-depreciable Assets

Notes Payable

Notes to Financial Statements

O

Objectivity Principle

Operating cash flow

Operating Expenses

Operating Income

Operating Leverage

Operating Margin

Operating revenue

Owners equity

P

Paid in capital in excess of par

Paid-in Capital

Percentage of Completion Method

Performance Measurement

Period Costs

Periodicity assumption

Personal wealth

Petty Cash

Post-closing Trial Balance

Preferred Stock

Prepaid Expenses

Prepaid insurance

Price-Earnings Ratio (P/E)

Process Costing

Product Costs

Profit Margin Calculation

Profitability ratios

Q

Qualified opinion

R

Ratio Analysis

Realized Gain

Relevance Principle

Reliability Principle

Responsibility Accounting

Retained Earnings

Retained Earnings Statement

Return of Capital

Return on Assets (ROA)

Return on equity

Return on Investment (ROI)

Revenue

Revenue Recognition

Revenue Recognition Examples

Revenue Recognition Principle

Revenue vs Capital Expenditure

T

Tangible vs Intangible Assets

Target Costing

Tax Accounting

Tax Basis

Tax Credit

Tax deduction

Tax Expense

Tax Liability

Tax Loss Carryback

Tax Loss Carryforward

Tax Shield

Tax-Exempt

Taxable Income

Tests of Controls

Time Period Assumption

Transfer Pricing

Treasury stock

Trend Analysis

Trial Balance

U

Unearned Revenue

Unearned Revenue Journal Entry

Unqualified opinion

Unrealized gain

V

Variable Costing

Variance Analysis

Vertical Analysis

W

Weighted Average Cost of Capital (WACC)

Working capital ratio

Working Capital Requirement