Accounting and business finance
Accounts payable
Amounts a business owes suppliers for goods or services received on credit.
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Accounting and business finance terms
Read your books, understand cash movements and distinguish profit from money available to spend.
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Accounting and business finance
Accounts receivable
Amounts customers owe for goods or services already supplied on credit.
Definition & exampleAccounting and business finance
Accrual
Recognising an amount in the period to which it relates, subject to the applicable accounting framework.
Definition & exampleAccounting and business finance
Balance sheet
A statement of assets, liabilities and equity at a particular date.
Definition & exampleAccounting and business finance
Cash flow
The movement of money into and out of a business over a period.
Definition & exampleAccounting and business finance
Depreciation
The systematic allocation of an asset’s depreciable amount over its useful life. In a simple cost-based example, this is cost less estimated residual value.
Definition & exampleAccounting and business finance
EBITDA
A profit measure before interest, taxes, depreciation and amortisation, whose adjustments must be clearly defined.
Definition & exampleAccounting and business finance
Gross margin
Revenue less the directly associated cost of sales, often expressed as a percentage of revenue.
Definition & exampleAccounting and business finance
Inventory
Goods and materials held for sale, production or use in producing goods or services.
Definition & exampleAccounting and business finance
Profit and loss statement
A statement of income and expenses for a reporting period, showing the resulting profit or loss.
Definition & exampleAccounting and business finance
Reconciliation
Explaining and resolving differences between two records, rather than merely adjusting them to agree.
Definition & exampleAccounting and business finance
Working capital
The operating funding tied up in items such as receivables, inventory and payables.
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