Accounting Terms

Some people think accountants have their own language. This Accounting Terminology Guide comes from the New York State Society of CPAs, or NYSSCPA.

• Account Payable: amount owed to a creditor for delivered goods or completed services
• Account Receivable: uncollected amount from a completed transaction of sales or services
• Accountant: person skilled in recording and reporting financial transactions
• Accounting: profession that involves recording and reporting financial transactions, including origination, recognition, processing, and summarization in corporate financial statements
• Accumulated Depreciation: the total decline of the value of assets from the time they were first used until the date of the financial statement or tax return
• Bad Debt: All or portion of an account, loan, or note considered uncollectible
• Balance Sheet: the basic financial statement of an  entity’s assets, liabilities, and equity
• Bankruptcy: the legal process that liquidates debts of an insolvent person after using certain assets. During bankruptcy, the debtor’s assets are held and managed by a court-appointed trustee.
• Capital Gain: the portion of the total gain resulting from the sale or exchange of an asset not taxed as ordinary income. Capital gains are taxed at a lower rate than ordinary income.
• Capital Stock: ownership shares of a corporation
• Certified Public Accountant: accountant who has satisfied the education, experience, and examination requirements of his or her jurisdiction to be certified as a public accountant
• Compliance Audit : review of financial records to determine whether the entity is complying with specific procedures or rules
• Earned Income: wages, salaries, professional fees, and other amounts received as compensation for services rendered
• Equity: the amount of a business’ total assets minus its total liabilities
• Financial Statements: presentation of financial data including balance sheets, income statements and statements of cash flow, or any supporting statement that communicates an entity’s financial position
• Generally Accepting Accounting Principles (GAAP): the conventions, rules, and procedures that define accepted accounting practices, usually referring to those from the Financial Accounting Standards Board (FASB)
• Generally Accepted Auditing Standards (GAAS): standards set by the American Institute of Certified Public Accountants (AICPA) for professional qualities and judgment in audit performances
• Income Statement : summary of the effect of revenues and expenses over a period of time
• Liability: debts or obligations owed by one entity (the debtor) to another entity (the creditor)
• Limited Liability Company (LLC): a designation for a business that combines limited liability for all owners (called members) and taxed as a Partnership
• Liquidation: ending a business’s activity by distributing its assets to the appropriate parties and paying its debts
• S Corporation: a corporation which, under the Internal Revenue Code, is generally not subject to federal income taxes; taxable income is passed to its stockholders similar to the way a partnership pays taxes

Anthem College Online offers an Associate of Science degree in Accounting Technology that helps students prepare for entry-level positions that directly support accountants, such as clerks, bookkeepers, and payroll and inventory specialists. For more information on the program, please visit our web site or call us at 1.866.837.1010.

Source:

“Accounting Terminology Guide.” Tufts University Entreprenet. Web. 5 April 2011.