99 Accounting & Financial Jargons (Explained) - QuickBooks Mauritius | Quick Focus Mauritius | Accounting Software

Accounting Glossary: Essential Financial Terms Explained

Basic Accounting Terms

Key Financial Concepts

Jargon for Non-Finance Professionals

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Term	Simple English Meaning
Accounts Payable	Money owed by a company to its suppliers for goods or services purchased on credit.
Accounts Payable Aging	A report showing how much money is owed to suppliers and for how long it has been owed.
Accounts Receivable	Money owed to a company by its customers for goods or services sold on credit.
Accounts Receivable Aging	A report showing how much money is owed by customers and for how long it has been owed.
Accrual Accounting	Recording revenues when earned and expenses when incurred, regardless of when cash is exchanged.
Accrued Expense	An expense that has been incurred but not yet paid, recorded as a liability on the balance sheet.
Activity-Based Costing (ABC)	A costing method that identifies activities in an organization and assigns the cost of each activity to products and services.
Amortization	Spreading the cost of an intangible asset over its useful life for accounting and tax purposes.
Asset	Something a company owns and controls that has value and can provide future economic benefits.
Audit	An independent examination of financial records to ensure accuracy and compliance with regulations.
Bank Feeds (QuickBooks)	Electronic connection between QuickBooks and your bank that automatically downloads transactions.
Bank Reconciliation	Matching a company's cash records to its bank statement to identify any discrepancies.
Bill of Materials (BOM)	A comprehensive list of raw materials, components, and assemblies required to build a product.
Billable Expenses (QuickBooks)	Costs incurred on behalf of a customer that you plan to charge back to them.
Bookkeeping	The systematic recording of financial transactions and maintaining accurate financial records.
Break-Even Point	The level of sales at which total revenue equals total costs, resulting in neither profit nor loss.
Budgeting (QuickBooks)	Creating financial plans for future income and expenses within QuickBooks to track performance.
Capital	Financial resources available for use, including money, equipment, and other assets owned by a business.
Capital Expenditure (CapEx)	Money spent to acquire, maintain, or improve long-term assets like buildings, equipment, or vehicles.
Cash Basis Accounting	Recording revenues when cash is received and expenses when cash is paid, regardless of when they occur.
Cash Flow	The amount of money moving in and out of a business, indicating its financial health.
Chart of Accounts	A list of all accounts used by a company to record financial transactions in its general ledger.
Class Tracking (QuickBooks)	A QuickBooks feature that allows you to track transactions by different segments of your business.
Compound Interest	Interest calculated on the initial principal and also on accumulated interest from previous periods.
Cost Accounting	A system for recording and analyzing costs associated with specific products or activities.
Cost Driver	A factor that causes a change in the cost of an activity, such as machine hours or labor hours.
Cost of Goods Sold (COGS)	The direct costs of producing the goods sold by a company, including materials and labor.
Credit	An accounting entry that increases liability, equity, or revenue accounts or decreases asset or expense accounts.
Current Assets	Assets that are expected to be converted to cash within one year, such as cash, inventory, and receivables.
Current Liabilities	Debts or obligations that are due within one year, such as accounts payable and short-term loans.
Customer Center (QuickBooks)	A QuickBooks feature that centralizes all customer information and transactions in one place.
Customer Credits (QuickBooks)	Amounts owed to customers for returns, overpayments, or discounts applied to their accounts.
Debit	An accounting entry that increases asset or expense accounts or decreases liability, equity, or revenue accounts.
Depreciation	Allocating the cost of a tangible asset over its useful life to reflect wear and tear or obsolescence.
Direct Labor	Wages paid to workers who are directly involved in the production of goods or services.
Direct Materials	Raw materials that can be directly traced to the finished product.
Dividend	A payment made by a corporation to its shareholders, usually as a distribution of profits.
Economic Order Quantity (EOQ)	A formula used to determine the optimal order quantity that minimizes total inventory costs.
Equity	The owner's residual interest in the assets of a business after deducting all its liabilities.
Estimates (QuickBooks)	Quotes or bids created in QuickBooks to provide potential customers with pricing for products or services.
Expense	The cost incurred in the process of earning revenue, such as rent, salaries, and utilities.
Factory Overhead	All indirect costs incurred during the production process, such as utilities, maintenance, and supervision.
FIFO (First-In, First-Out)	An inventory valuation method where the oldest items are sold first.
Financial Statement	Formal reports showing the financial activities and performance of a business, including income statement and balance sheet.
Fiscal Year	A one-year period that a company uses for financial reporting and budgeting, not necessarily the calendar year.
Fixed Asset	A long-term tangible asset that is not expected to be converted to cash within one year, such as buildings and machinery.
Fixed Asset Manager (QuickBooks)	A QuickBooks tool for tracking and managing fixed assets, including depreciation calculations.
Finished Goods Inventory	Completed products that are ready for sale to customers.
Goodwill	An intangible asset representing the value of a business's reputation, brand, and customer relationships.
General Ledger	The complete record of a company's financial transactions, containing all accounts used by the business.
Gross Profit	Revenue minus the cost of goods sold, showing the profit before deducting operating expenses.
Income Statement	A financial statement showing a company's revenues, expenses, and profits over a specific period.
Invoices (QuickBooks)	Bills created in QuickBooks to request payment from customers for products or services sold.
Intangible Asset	An asset that is not physical in nature, such as patents, copyrights, trademarks, and goodwill.
Interest	The cost of borrowing money or the return on invested capital, expressed as a percentage of the principal.
Inventory	Goods available for sale or raw materials used in production that a company holds for resale.
Inventory Assembly (QuickBooks)	A QuickBooks feature for tracking assembled products made from multiple components.
Items and Services (QuickBooks)	The products and services your business sells, set up in QuickBooks for invoicing and tracking.
Journal	A record where financial transactions are first entered chronologically before being posted to ledger accounts.
Journal Entry (QuickBooks)	A QuickBooks feature for manually recording transactions that don't fit into standard forms like invoices or bills.
Job Costing	An accounting method that tracks the costs and revenues associated with specific projects or jobs.
Just-In-Time (JIT)	An inventory management system where materials are received only as they are needed in the production process.
Lean Manufacturing	A production method focused on minimizing waste while maximizing productivity.
LIFO (Last-In, First-Out)	An inventory valuation method where the most recently acquired items are sold first.
Liability	A company's financial debt or obligations to other parties, such as loans, accounts payable, and mortgages.
Liquidity	The ability of a company to meet its short-term financial obligations with its available cash and assets.
Manufacturing Overhead	All indirect costs associated with the manufacturing process, excluding direct materials and direct labor.
Merchant Services (QuickBooks)	QuickBooks payment processing services that allow businesses to accept credit card and bank payments.
Multi-Currency (QuickBooks)	A QuickBooks feature that enables businesses to record transactions in multiple currencies.
Net Income	Total revenue minus total expenses, taxes, and costs, representing the company's bottom-line profit.
Net Profit	The amount of money a company has left after all expenses have been deducted from total revenue.
Online Banking (QuickBooks)	QuickBooks feature that connects to your bank for automatic downloading and matching of transactions.
Operating Expense	Expenses related to a company's main business activities, such as rent, utilities, salaries, and marketing.
Overhead	Ongoing business expenses not directly attributed to creating a product or service, such as administrative costs.
Overhead Rate	A method for allocating indirect costs to products or services, usually expressed as a percentage of direct costs.
Payroll (QuickBooks)	QuickBooks service for processing employee payments, calculating taxes, and managing payroll compliance.
Payroll Items (QuickBooks)	Components of employee compensation in QuickBooks, such as wages, taxes, and deductions.
Point of Sale (POS) (QuickBooks)	QuickBooks system for processing sales transactions at retail locations, including hardware and software.
Process Costing	An accounting method used when identical products are mass-produced, assigning costs to production processes.
Profit	The financial gain when revenue exceeds expenses, also known as net income or earnings.
Profit and Loss (QuickBooks report)	A QuickBooks report showing revenues, expenses, and profits over a specific period.
Profit and Loss Statement (P&L)	Another name for the income statement, showing revenues, costs, and expenses during a specific period.
Purchase Orders (QuickBooks)	Documents created in QuickBooks to formally request goods or services from suppliers.
QuickBooks	Accounting software developed by Intuit for small and medium-sized businesses to manage finances.
Raw Materials	Basic materials used to produce goods, such as wood, metal, or fabric.
Revenue	Income generated from normal business operations, such as sales of goods or services.
Sales Receipts (QuickBooks)	Documents created in QuickBooks to record sales that are paid immediately at the time of sale.
Sales Tax (QuickBooks)	QuickBooks feature for calculating, tracking, and remitting sales tax to tax authorities.
Sales Tax Payable	Tax collected from customers that must be remitted to the government, recorded as a liability.
Standard Cost	Predetermined costs for materials, labor, and overhead used to value inventory and measure performance.
Time Tracking (QuickBooks)	QuickBooks feature for recording hours worked by employees or contractors for payroll and billing purposes.
Trial Balance	A report listing all accounts and their balances at a specific point in time to ensure debits equal credits.
Undeposited Funds (QuickBooks)	A QuickBooks account holding payments received but not yet deposited in the bank.
Variable Cost	Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.
Vendor Center (QuickBooks)	A QuickBooks feature that centralizes all vendor information and transactions in one place.
Vendor Credits (QuickBooks)	Amounts owed by vendors to your business for returns, overpayments, or discounts.
Work in Progress (WIP)	Partially completed goods that are still in the production process.
Working Capital	The difference between a company's current assets and current liabilities, indicating short-term financial health.
Write-Off	Reducing the value of an asset to zero for accounting purposes, typically when it's determined to be worthless.
Yield	The earnings generated from an investment, expressed as a percentage of the investment's cost or current market value.