Accounting Terms Get an explanation of terms found throughout the Accounting articles. Sharon Mulligan
Accounting - accounting is simply a record of your financial transactions, what you have bought and what you have sold, money in and money out
Assets - an asset is something that you own, these can be Fixed assets such as Property & Buildings, Plant & Machinery, Vehicles etc or Current Assets such as Debtors, Bank Accounts, Stocks etc.
Balance Sheet - in accounting terms this is what money you have left as of a period in time, after you have made your profit & loss what else is left
Cashflow - this is a forecasted amount of money available based on unpaid invoices, it looks at all Cash accounts in your General Ledger and adds on unpaid Invoices/credit notes to give you your Cashflow
Cash Account - is an account where all cash transactions are recorded such as your Bank accounts
Cost Centres - a Cost Centre is a company division or department relating to your business products/services
Cost of Sales - this is the total of costs incurred to create your product or service
Credit - this is an amount issued into an account and recorded on the right column, the rule for personal accounts is credit the giver, for General accounts you credit Income/gains
Debit - this is an amount received from an account and recorded on the left column, the rule for personal accounts is debit the receiver, for General accounts you debit Expenses/losses
Dimensions - this is a Cost Centre level
ERP - Enterprise Resource Planning
An ERP system allows you to record the full journey in your Financial process, for example from Quote to Order to Delivery to Invoice to actually receiving payment, you get to build the full picture and trace the origin
Equity - equity means share in the company, it is the difference between Assets and Liabilities
Gl Account - this is a General Ledger Account which records the financial transactions that you post in the system
Gross Profit - Gross profit is the profit a company makes after deducting costs from the selling of goods or services
Journal Entry - A journal entry records every Financial transaction in Enterpryze, some are generated automatically for you and you can also add manual journal entries
Liabilities - a Liability is something that you owe and are usually required to Pay; examples are Tax, Creditors, Bank loans
Non-operating Inc/Exp - these are costs outside of your normal business operations, examples are Foreign exchange profit/loss, Discount received, loan income
Open transactions - this means any financial transaction that has not yet been paid or reconciled, still has a balance due
Operating Costs - what it costs to run your business, for example value of stock you have purchased, light, heat, rent, salaries etc
Payables - this means what you have yet to pay your Suppliers for goods or services, money that you owe
Profit & Loss - this is simply how your business has performed, did you make any money
Profit Period - on the Balance Sheet report, this is your Profit for a period, Enterpryze automatically calculates this for you based on your Assets minus your Liabilities
Receivables - this means what you are to receive payment for from your Customers, payments that are due to your business
Taxation & extraordinary – these are gains or losses outside of normal activity that are unusual items
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