Hello, Guest   |   Login here

GLOSSARY

GLOSSARY

Accounting Equation A mathematical expression of the relationship between assets and claims represented by liabilities and owner's equity or the owner's personal stake in the firm.

Acceleration Instead of recording transactions individualy, these are added together for the whole period and registered on 31st December.

Accrual accounting Income is recognised in a company's books at the time the revenue is earned (but not necessarily received) and records expenses when liabilities are incurred (but not necessarily paid for).

Asset An economic resource that is expected to yield a stream of benefits to the owner.

Adjustments in the Financial Statements Transactions that flow continously and cannot be kept up to date, such as use of inventory, which is more efficient to accumulate and enter the total value at the end of the period when the statements are prepared. Same with non monetary transactions that flow continously as depreciation. Also revenue from unearned interest at bank or unpaid interest on credits, which value is known only when the statements from the bank are received.

I. Unadjusted Operating Entries

Transactions that are of a monetary nature which are incurred and paid during the reported period such as debtors, inventory, prepayments and current expenses such as salaries, consultants, marketing, rent, electricity, etc.

II. Unadjusted Operating Entries

Transactions that can be recorded when they occur and which do not “flow” continuously by are recorded on a ‘‘spot’’ basis, meaning, when they occur, such as, sales, salaries, rent, accounting and legal fees, purchase of fixed assets like cars, equipment, furniture.

Balance Sheet A representation of the accounting equation, Assets = Claims. It is used in accounting to clearly see the state of a company's

Subscribe today and learn the fundamentals

Hello,
It seems you don't have access to the exclusive content of The Course.

In order to gain access to the content of The Course you will have to register with EntreprenAble. Membership with EntreprenAble will also give you access to our interactive Business Game and Accounting Simulations.

Subscribe today and get:

  • Unlimited website access to The Course
  • Optimized view for Desktop, Tablet and Mobile devices
  • Free 7-day, no obligation trial - normally £15
Start free trial
Test-drive the system for free
Page 1 of 2 1 2