Accounting Terms and Ratios
United States - All States
I have put together some simple Accounting Terms and Ratios that could help you get the hang of some of the terms and jargon in accounting. Hope this help any students.
1. Bills that need to be paid as part of the normal business process.
1. Any form of debt owed to your company due to services or products rendered.
Cost of sales:
1. The cost of producing a sale. This includes the cost to the business for delivering a product of sevice.
1. Ratio of income used to cover specific debts as opposed to total company debts (Accounting).
1. Analyzing of the current resources of a business in contrast to the current debts to determine the short term stability of the business (Accounting).
1. In accounting: Allows the financial period to begin in any month.
Gross margin percentage:
1. The gross margin divided by sales. Shown as a percentage.
Receivable turnover ratio:
1. Index of the scope of credit that a business gives compared its sales as an assessment of its collection efficiency.
2. Sales on credit for an accounting period that is divided by the average accounts receivable balance.
1. Ratio of loans taken by a business compared to its capital that is used to assess financial stability.
1. An amount entered into an accounting record indicating a sum that is owed.
2. To remove (money) from a customers account.
3. Debit card: a card allowing the holder thereof to transfer money electronically from one bank account to another when a purchase has been made.
1. Direct transfer of funds from one bank to another.
2. A payment method where the payer permits the payee to take money from directly from his bank account.
1. Balance of a debt, negative sum in a bank account.
Long term liabilities:
1. Column in a ledger that details the debts that a business will have to pay off in the coming years (Accounting).
Short term liabilities:
1. Clause in a statement which lists the debts that a business must repay during the current year (Accounting).
1. Section of a balance statement which details the debts that a business must repay during the current year (Accounting).
1. Account restriction, placing of restrictions on a bank account that had insufficient funds to cover checks.
1. Obtaining information concerning a specific bank account.
1. Detailed list of bank account activity (withdrawals, deposits, etc.).
1. Department of a bank responsible for managing accounts.
1. Account which shows the current debts of a business.
1. Bank account offered by the borrower as a guarantee that he will repay his loan.
1. Bank account set up for the benefit of someone else.
1. Continuous or current bank account, checking account.
2. international transactions of a country that arise from current flows.
Current accounts multiplier:
1. One of the components of the rate of liquidation that banks must maintain against money deposited into accounts.
1. Portion of long term loans that a business must repay in the current accounting period (Accounting).
1. Official investigation of a business accounts by an auditor.
1. (Accounting) raising money or taking out loans to cover business expenses (including interest and linkage differentials).
1. A company statement showing net income or loss for a financial period.
1. This includes payroll taxes and benefits, the burden rate is used as a percentage and added to the payroll amount.
1. Investigation of financial records by an outside agency.
1. A concept in accounting and tax that estimates the loss of asset value over time. Cars for example depreciate over time.
1. Depreciation reduces the book value of assets. The value of assets are depreciated each month by a predetermined amount.
Return on assets:
1. Net profit that gets divided by total assets. This is a good measure of a profitable business.
1. Sales divided by total assets. Can be used to compare business performance and compare a business to others on the same industry.
1. Any assets that can be quickly converted into cash. This includes stock and debtors on book. Also called liquid assets.
Net working capital turnover:
1. (Accounting) index of a companys debt compared to the current assets (used to assess efficiency)
Total current assets:
1. (Accounting) sum of all current cash and cash equivalents (accounts receivable, securities, etc.)
1. Includes your fixed and immovable assets. Like property, machinery, and equipment. These cannot be easily converted into cash.
1. Table used to concentrate balances of various business accounts (Accounting).
Net cash flow:
1. Cash balance remaining in a business possession (Accounting).