Resources

Accounting Glossary

Simple explanations of common accounting and bookkeeping terminology.

  • Accounts Payable

    Money a business owes to its suppliers for goods or services it has received but not yet paid for.

  • Accounts Receivable

    Money owed to a business by its customers for goods or services delivered but not yet paid for.

  • Balance Sheet

    A snapshot of what a business owns and owes at a single point in time — its assets, liabilities and equity.

  • Cash Flow

    The money moving into and out of a business over a period, showing whether it can cover its day-to-day costs.

  • Corporation Tax

    A tax that limited companies pay on their taxable profits.

  • Management Accounts

    Regular internal financial reports that help business owners understand performance and make informed decisions.

  • Profit & Loss

    A statement summarising income and expenses over a period to show whether a business made a profit or a loss.

  • Reconciliation

    Matching the transactions in your records against bank statements or other sources to confirm they agree.

  • Trial Balance

    A list of all ledger balances used to check that total debits equal total credits before preparing accounts.

  • VAT

    Value Added Tax — a tax charged on most goods and services sold by VAT-registered businesses in the UK.

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