Gossary of Terms for Accounting and Management Technology

This glossary will help to explain in a simple way some of the most used accounting terms. The main objective of this glossary is to be able to share a little of my knowledge about my study program.

Financial statements: Noun; Financial statements are formal records of the financial activities and position of a business, person, or other entity. The purpose of financial statements is to provide information about the financial position, performance, and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.; Example: The accountant must present the financial statements of the company at the end of each month.
Receipt: Noun; A written or printed statement acknowledging that something has been paid for or that goods have been received.; Example: Always make sure you get a receipt
Bank statement: Noun; A printed record of the balance in a bank account and the amounts that have been paid into it and withdrawn from it, issued periodically to the holder of the account.; Example: Account statement is required to apply for visas
Check: Noun; A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.; Example: The client will send us a certified check next week.
Audit: Noun; An official inspection of an individual's or organization's accounts, typically by an independent body.; Example: Audits can't be expected to detect every fraud.
Cash flow: Noun; The term cash flow refers to the net amount of cash and cash equivalents being transferred in and out of a company.; Example: It is necessary to prepare the Cash Flow to know how much money the company currently has.
Ratio: Quantitative relationship between two phenomena that reflects a specific situation of profitability, level of investment, etc.; Example: From the balance sheets of a company, the ratios are indicators that allow inter-company comparisons.
Mortgage: Noun; A legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.; Example: I put down a hundred thousand in cash and took out a mortgage for the rest.
Credit: Noun; The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.; Example: I've got unlimited credit.
Net profit: Noun; The actual profit after working expenses not included in the calculation of gross profit have been paid.; Example: The company reported net profits up 7.6 percent.
Interest: Noun; Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.; Example: The monthly rate of interest.
Inventory: Noun; A complete list of items such as property, goods in stock, or the contents of a building.; Example: The accountant must ensure inventory control.
Provider: Noun; A person or thing that provides something.; Example: A leading provider of personal financial services.
Tax: Noun; A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.; Example: Higher taxes will dampen consumer spending.
Budget: Noun; An estimate of income and expenditure for a set period of time.; Example: Keep within the household budget.
Dividends: Noun; A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves).; Example: All dividends this year will be distributed equally.
Human Resources: Noun; The personnel of a business or organization, especially when regarded as a significant asset.; Example: Our core skills are in building pan-European businesses and managing human resources
Fixed costs: Noun; Business costs, such as rent, that are constant whatever the quantity of goods or services produced.; Example: Our fixed costs increased 3% this month compared to last month.
Inflation: Noun; A general increase in prices and fall in the purchasing value of money.; Example: Policies aimed at controlling inflation.
Creditors: Noun; A person or company to whom money is owed.; Example: He sold his Ferraris to pay off his creditors.