Accounting and financial statements

cost accounting

calculating all the expenses involved in producing something, including materials, labour and all other expenses

tax accounting

calculating how much an individual or a company will have to pay to the local and national governments (and trying to reduce this to a minimum)

auditing

inspecting and reporting on accounts and financial records

accounting

preparing financial statements showing income and expenditure, assets and liabilities

managerial or management accounting

providing information that will allow a business to make decisions, plan future operations and develop business strategies

“creative accounting”

using all available accounting procedures and tricks to disguise the true financial position of a company

bookkeeping

writing down the details of transaction (debits and credits)

cash flow statement

a statement giving details of money coming into and leaving the business, divided into day-to-day operations, investing and financing

income statement

a statement showing the difference between the revenues and expenses of a period

balance sheet

a statement showing the value of a business’s assets, its liabilities and its capital or shareholders’ equity (money the business has that belongs to its owners)

income

all the money received from business activities during a given period

expenditure

all the money that a business spends on goods or services during a given period

budget

a financial operating plan showing expected income and expenditure

asset

anything owned by a business - cash, buildings, machines, equipment, etc

liabilities

all the money that a company will have to pay to someone else in the future, including debts, taxes and interest payments

debit

an entry in an account, recording a payment made

credit

an entry in an account, recording a payment received

intangible

adjective describing something without a material existence, which you can’t touch

accrued

adj describing a liability which has been incurred but not yet invoiced to the company

deferred

delayed or postponed until a later time