Financial, Accounting & Business Glossary
Explore clear and easy-to-understand definitions of accounting, bookkeeping, tax, financial, business, and compliance terms to help you better understand the financial side of your business.
A
The process of recording, organizing, and reporting a business’s financial activities for accurate tracking and compliance.
Accounts payable is the amount a business owes to suppliers or vendors for goods or services purchased on credit.
Accrual accounting records revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid.
Accrued expenses are costs a business has incurred but has not yet paid or recorded as a cash payment, such as unpaid salaries, interest, or utilities.
Accounts receivable is the money customers owe a business for goods or services that have already been provided but not yet paid for.
Accrued Revenue
Accrued revenue is revenue that has been earned but has not yet been billed or collected.
Amortization
Amortization is the systematic allocation of the cost of an intangible asset over its useful life. It can also refer to the gradual repayment of a loan through scheduled payments.
Assets
Assets are resources owned or controlled by a business that are expected to provide future economic benefits, such as cash, inventory, equipment, and accounts receivable.
Amendment
An amendment is an official change or addition made to an existing business document, legal filing, or organizational record.
Annual Report
An annual report is a yearly filing or report that provides important information about a business, such as its company details, financial information, ownership, or other required records.
Articles of Organization
Articles of Organization are the legal formation documents filed with a state to create a Limited Liability Company (LLC).
Audit
An audit is an independent examination of a company’s financial records, transactions, and financial statements
B
A financial statement showing assets, liabilities, and equity at a specific date.
The process of comparing accounting records with bank statements.
Recording and organizing a company’s financial transactions.
A business entity is a legally recognized organization formed to conduct business activities.
Common types include LLCs, corporations, partnerships, and sole proprietorships.
A financial plan for expected income, expenses, and cash flow. Licensing requirements vary depending on the business type, location, and industry.
A board of directors is a group responsible for overseeing a corporation’s management and major business decisions.
A business license is an official authorization that allows a business to operate legally within a specific location or jurisdiction.
Business credit refers to a company’s ability to borrow money or obtain financing based on its credit history and financial profile.
C
A capital contribution is money, property, or other assets contributed by an owner to a business. It increases the owner’s investment in the business and may be used to fund operations or growth.
Capital stock represents the ownership shares issued by a corporation to its shareholders.
It reflects the portion of the company owned by shareholders.
Cash basis accounting records revenue when payment is received and expenses when they are paid. It is a simpler accounting method commonly used by certain small businesses.
A cash flow statement is a financial statement that reports cash received and cash paid during a specific period.
It generally covers operating, investing, and financing activities.
A chart of accounts is a structured list of the accounts a business uses to record financial transactions.
It typically includes accounts for assets, liabilities, equity, revenue, and expenses.
Cost of Goods Sold is the direct cost of producing or purchasing the goods or services a business sells. It is used to calculate gross profit by subtracting COGS from revenue
Current assets are assets expected to be converted into cash, sold, or used within one year or the business’s normal operating cycle.
Examples include cash, accounts receivable, and inventory.
Current liabilities are financial obligations a business expects to pay within one year or its normal operating cycle.