Accounting Period
Accounting period - The time frame used for financial reporting, normally months, quarters or years.
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finance
accounting
Accounting
Accounts
Accounts - Financial statements prepared at the end of a period to reflect the profit of loss or the period and financial position at the end of the period.
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finance
accounting
Accounts Payable
Accounts Payable - Amounts due for payment to suppliers of goods or services, also described as trade creditors.
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finance
accounting
Accounts Receivable
Accounts Receivable - Amounts due from customers, also described as a trade debtors.
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finance
accounting
Accruals Basis
Accruals Basis - The effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they ar...
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finance
accounting
Amortisation
Amortisation - Process similar to depreciation, usually applied to intangible fixed assets.
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finance
accounting
Annual Accounts
Annual accounts - Also known as financial, company or statutory accounts. Businesses must produce an annual set of accounts detailing business finances.
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finance
accounting
Annual Equivalent Rate (Aer)
Annual Equivalent Rate (AER) - An interest rate reflecting what you'll actually pay, or earn, on your money after the effects of compounding are taken into acco...
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finance
accounting
Annual General Meeting (Agm)
Annual general meeting (AGM) - A meeting of the members (shareholders) of a company at which the board of directors lay the company's accounts and report for sh...
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finance
accounting
Annual Percentage Rate (Apr)
Annual Percentage Rate (APR) - The rate of interest you agree to pay on money borrowed, and a useful way to compare how much interest you would pay on loans fro...
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finance
accounting
Annual Report and Accounts
Annual report and accounts - Most organisations are required to produce an annual report on their activities and enclose the accounts of the company's performan...
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finance
accounting
Articles of Association
Articles Of Association - Document setting out the relative rights of shareholders in a limited liability company.
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finance
accounting
Audit
Audit - An official inspection of a company's accounts.
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finance
accounting
Auditors
Auditors - Professional accountants who check the books of account, ask for explanations from the directors and examine the report and accounts, verifying that ...
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finance
accounting
Bad Debt
Bad debt - The amount owed by a customer who cannot, or will not, pay for goods or services they have had.
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finance
accounting
Bank Rate
Bank rate - In the UK it is set by the Bank of England, to control the money supply and inflation. Banks usually lend at anything from 2 per cent above bank rat...
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finance
accounting
Base Rate
Base rate - Set by the Bank of England, this is the country's base rate of interest and influences the rate of interest on financial products and services.
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finance
accounting
Board of Directors
Board of directors - A group of people to whom the shareholders have delegated the task of running the day-to-day affairs of the company. They normally define t...
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finance
accounting
Bond
Bond - A form of IOU issued by the company, or a government or other institution, offering to pay interest in return for borrowing your money, or to pay you ...
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finance
accounting
Bootstrapping
Bootstrapping - Building a company without external investment, often relying on personal savings and running with the lowest possible operating costs
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finance
accounting
Called Up (Share Capital)
Called Up (Share Capital) - The company has called upon the shareholders who first bought the shares, to pay for their shares.
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finance
accounting
Capital
Capital - Anything invested into a company that has a tangible value or benefit to its own, such as a machinery, patents, or financial assets like cash.
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finance
accounting
Capital Employed
Capital employed - Sometimes called total assets less current liabilities or total shareholders' funds plus long-term finance (the two calculations provide the ...
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finance
accounting
Capital Expenditure
Capital Expenditure - Spending on non-current (fixed) assets of a business.
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finance
accounting
Capital Expenditure (CAPEX)
Capital expenditure (CAPEX) - Funds used by the company to buy, maintain or improve its fixed assets such as buildings, vehicles, equipment, or land.
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finance
accounting
Cash Flow Projections
Cash Flow Projections - Statements of cash expected to flow into and out of a business over a particular period.
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finance
accounting
Charge Over Assets
Charge over assets - Used when all or some of the assets of an organisation have been used as collateral to secure a transaction of some kind (usually the borro...
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finance
accounting
Collateral
Collateral - Security, usually for a loan. It is effected by enabling the giver of the loan the right to seize the asset that is being used as collateral and se...
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finance
accounting
Companies Act
Companies Act - Legislation to control the activities and administration of limited liability companies.
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finance
accounting
Corporation Tax
Corporation tax - Paid by UK companies on their profits.
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finance
accounting
Cost of Production
Cost of production - Similar to cost of goods sold and used mostly in academic accounts.
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finance
accounting
Cost of Sales
Cost Of Sales - See 'cost of goods sold'.
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finance
accounting
Cost-push Inflation
Cost-push inflation - Cost-push inflation occurs when production input costs, such as wages and raw materials, rise and producers pass the increased costs on to...
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finance
accounting
Credit (Terms of Business)
Credit (Terms Of Business) - The supplier agrees to allow the customer to make payment some time after the delivery of the goods or services. Typical trader cre...
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finance
accounting
Credit Note
Credit Note - A document summarising the reduction in charge on an invoice (bill), usually because the customer has returned defective goods or has received ina...
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finance
accounting
Credit Sale
Credit Sale - A business entity sells goods or services and allows the customer to make payment at a later date.
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finance
accounting
Creditor
Creditor - A person or firm that has lent your business money or to whom you owe money.
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finance
accounting
Creditors
Creditors - Suppliers to whom we owe money.
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finance
accounting
Current Asset
Current Asset - An asset that is expected to be converted into cash within the trading cycle. Contrasting a Fixed asset that is held to use within the business ...
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finance
accounting
Current Liability
Current Liability - A liability which is expected to be settled in the entity's normal operating cycle, generally within 12 months after the balance sheet date.
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finance
accounting
Debit (In Bookkeeping)
Debit (In Bookkeeping) - Entries in the debit column of a ledger account representing increases in assets or expenses, or decreases in liabilities or income.
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finance
accounting
Debtor
Debtor - A person or firm that owes money to your business.
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finance
accounting
Debtors
Debtors - The amount outstanding on customers' accounts.
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finance
accounting
Deferred Income
Deferred Income - Income invoiced, or paid for, in advance of providing the service resulting in the income being deferred to a later accounting period, to when...
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finance
accounting
Deferred Taxation
Deferred Taxation - Income & expenditure may be recognised at different time for accounting and tax purposes. Deferred tax is a way to balance this timing diffe...
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finance
accounting
Demand-pull Inflation
Demand-pull inflation - Occurs when demand is high, and suppliers increase prices until demand reduces.
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finance
accounting
Director
Director - A member of the board of directors who bears the responsibility of managing the company on behalf of the shareholders.
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finance
accounting
Director(s)
Director(S) - Person(s) appointed by shareholders of a limited liability company to manage the affairs of the company.
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finance
accounting
Dividend
Dividend - Money paid by a company from its profits to its shareholders.
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finance
accounting
Drawings
Drawings - Cash taken for personal use, in sole trader or partnership businesses, treated as a reduction of ownership interest.
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finance
accounting
Earning
Earning - A phrase that is often interchangeable with profits.
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finance
accounting
Earnings per Share (EPS)
Earnings per share (EPS) - A measure of how much profit a company is making for its shareholders.
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finance
accounting
Entity, Entities
Entity, Entities - Something that exists independently, such as a business which exists independently of the owner.
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finance
accounting
Equity
Equity - Used by analysts to determine the financial health of a company. It also represents what would be left if all of a businesses' assets were liquidated ....
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finance
accounting
Expense
Expense - Generally the running costs of a business.
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finance
accounting
Financial Management
Financial management - Planning, analysing, monitoring, organising, reviewing, and controlling a company's finances.
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finance
accounting
Fixed Asset
Fixed Asset - An asset that is held by an enterprise for use in the production or supply of goods or services, for rental to others, or for administrative purpo...
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finance
accounting
Fixed Assets
Fixed assets - Assets that you intend to keep for longer than twelve months.
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finance
accounting
Fixed Costs
Fixed costs - Costs that vary over time rather than in proportion to throughput, e.g. Rent of premises, salaries etc.
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finance
accounting
Forecast
Forecast - Forecast estimate of future performance and position based on stated assumptions and usually including a quantified amount.
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finance
accounting
Gearing
Gearing - The proportion of borrowings to total financing (i.e. shareholders' funds plus total borrowing).
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finance
accounting
Going Concern Basis
Going Concern Basis - Financial statements are prepared on this basis assuming that the business will continue operating into the foreseeable future.
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finance
accounting
Gross
Gross - The total amount of money a company has earned in a period of time before deductions such as taxes.
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finance
accounting
Gross Profit (Or Margin)
Gross Profit (Or Margin) - Sales minus cost of sales before deducting administration and selling expenses (see also gross margin).
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finance
accounting
Inflation
Inflation - A percentage figure that represents how much prices of goods and services increased over a specific period.
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finance
accounting
Insolvency
Insolvency - When a company becomes unable to pay off its creditors, or its liabilities exceed its assets.
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finance
accounting
Intangible Fixed Asset
Intangible Fixed Asset - An asset, such as a right, that cannot be touched (e.g. a trademark or Goodwill).
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finance
accounting
Invoice (Bill)
Invoice (Bill) - A document from supplier to buyer summarising goods or services supplied and the price payable.
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finance
accounting
Invoice Factoring
Invoice factoring - When a business sells its invoices to a third party, which will then add their own fee to the charges and seek the money from the debtor.
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finance
accounting
Leasing
Leasing - Acquiring the use of an asset through a rental agreement.
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finance
accounting
Limited Liability
Limited Liability - Most commonly used to describe the limit of liability of a shareholder (member) to contribute to the assets of a company if it goes into liq...
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finance
accounting
Limited Liability Company
Limited Liability Company - Company where the liability of the owners is limited to the amount of capital they have agreed to contribute.
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finance
accounting
Liquid Asset
Liquid asset - An asset that can be easily converted into cash.
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finance
accounting
Management Buyout (Mbo)
Management buyout (MBO) - The management of a company buy that company, or part of it, from its owners.
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finance
accounting
Margin
Margin - The amount of money a company makes, expressed as a percentage. For example, a gross profit of £1m on sales of £10m is a 10% profit margin.
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finance
accounting
Market Capitalisation
Market Capitalisation - The stock-market value of a company. It is calculated by multiplying the total number of issued ordinary shares by today's price per sha...
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finance
accounting
Memorandum (For a Company)
Memorandum (For A Company) - Document setting out main objects of the company and its powers to act.
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finance
accounting
Negative Equity
Negative equity - When the value of an asset is less than what you initially paid.
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finance
accounting
Net
Net - The amount of profit left after deductions such as tax have been made.
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finance
accounting
Net Assets
Net Assets - Assets minus liabilities (equals ownership interest).
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finance
accounting
Net Book Value
Net Book Value - Costs of non-current (fixed)( asset minus accumulated depreciation.
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finance
accounting
Net Profit
Net Profit - Sales minus cost of sales minus all administrative and selling costs.
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finance
accounting
Nominal Interest Rate
Nominal interest rate - An interest rate that isn't adjusted for inflation.
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finance
accounting
Nominal Value (Of a Share)
Nominal Value (Of A Share) - The amount stated on the face of a share certificate as the named value of the share when issued.
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finance
accounting
Operating Expenditure (OPEX)
Operating expenditure (OPEX) - On-going costs for running a business, service or system that includes day-to-day expenditure.
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finance
accounting
Operating Profit/Loss
Operating profit/loss - The profit or loss a company makes, which reflects how a business is performing.
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finance
accounting
Ordinary Shares
Ordinary Shares - Shares in a company which entitle the holder to a share of the dividend declared and a share in net assets on closing down the business.
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finance
accounting
Overheads
Overheads - Costs that do not change regardless of the level of production and are not typically involved with the cost of production, such as rent.
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finance
accounting
Patent
Patent - An official legal document stating that a company has the sole right to make, use, or sell a particular invention.
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finance
accounting
Paye
PAYE - Stands for Pay As You Earn. A method of collecting income tax on behalf of the Government by taking it directly from your employees' wages.
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finance
accounting
Pbit
PBIT - Profit before interest and tax.
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finance
accounting
Prepayment
Prepayment - An amount paid for in advance for and benefit to the business, such as insurance premiums or rent in advance. Initially recognised as an asset, the...
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finance
accounting
Product Elasticity of Demand (Ped)
Product elasticity of demand (PED) - The degree to which demand for products or services changes due to changes in price.
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finance
accounting
Profit
Profit - Calculated as revenue (income) minus expenses.
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finance
accounting
Profit and Loss Account
Profit and loss account - A financial statement that shows the income and outgoings of a company over a certain period of time showing the net profit or loss fo...
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finance
accounting
Provision
Provision - A liability of uncertain timing or amount.
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finance
accounting
Provision for Doubtful Debts
Provision For Doubtful Debts - An estimate of the risk of not collecting full payment from credit customers, reported as a deduction from trade receivable (debt...
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finance
accounting
Real Interest Rate
Real interest rate - The rate of interest minus the current rate of inflation.
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finance
accounting
Registrar of Companies
Registrar Of Companies - An official authorised by the government to maintain a record of all annual reports and other documents issued by a company.
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finance
accounting
Reserves
Reserves - The claim which owners have on the assets of a company because the company has created new wealth for them over the period since it began. Most commo...
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finance
accounting
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