The sky has never been the limit. We are our own limits. It’s then about breaking our personal limits and outgrowing ourselves to live our best lives.”
I will admit, the Accounting profession does have its own language – possibly just like any other profession but being ahead and familiar with not only the language but the many acronyms and abbreviations that come along with it, is very beneficial.
Whether you are a young professional seeking reference material, small business owner working on your balance sheet or it's your first day in your accounting position. This information will be very useful.
Account Receivable: AR: The amount of money owed by your customers after goods or services have been delivered.
Accounts Payable: AP: The amount of money you owe creditors (suppliers, etc.) in return for good and/or services.
Balance Sheet: BS: A financial report that summarize a company’s assets (what it owns), liabilities (what it owes) and owners equity at a given time.
Cash Flow: CF: The revenue or expense expected to be generated through business activities (sales, manufacturing) over a period of time.
Credit: CR: An accounting entry that ay either decrease assets or increase liabilities and equity on the company’s balance sheet, depending on the transaction
Debit: DR: An accounting entry where there is either an increase in assets or a decrease in liabilities
Expense (Fixed (FE), Variable (VE), Accrued(AE), Operation (OE)): The fixed, variable accrued or day-to-day cost that business may incur through its operations.
Generally Accepted Accounting Principles: GAAP: A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data.
If you are interested in learning more about the accounting language, continue to follow our blog as we open up the Accounting World to you.
Author’s note: All of the basic accounting term definitions were provided by Investopedia.
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