Important Vocabulary

• Bookkeeping: Writing down the details of transactions (debits and credits)
• Accounting: Keeping financial records, recording income expenditure, valuing assets and liabilities, and so on
• Managerial accounting: Preparing budgets and other financial reports necessary for the management
• Cost accounting: Working out the unit costs of products, including materials, labor, and all other expenses
• Tax accounting: Calculating an individual’s or a company’s liability for tax
• Auditing: Inspection and evaluation of accounts by the second set of accountants
• Creative accounting: Using all available accounting procedures and tricks to disguise the true financial position of a company
• Shareholders or stockholders: A company’s owners
• Earnings or income: The revenues received by a company during a given period, minus the cost of sales, operating expenses, and taxes
• Liabilities: All the money that a company will have to pay to someone else in the future, including taxes, debts, and interest and mortgage payments
• Turnover: The amount of business done by a company over a year
• Assets: Anything owned by a business (cash investments, buildings, machines, and so on) that can be used to produce goods or pay liabilities
• Depreciation or amortization: The reduction in the value of a fixed asset during the years it is in use (charged against profits)
• Debtors or accounts receivables: Sums of money owed by customers for goods or services purchased on credit
• Creditors or accounts payable: Sums of money owed to suppliers for purchases made on credit
• Stock or inventory: (The value of) raw materials, work in progress, and finished products stored ready for sale
• Overheads or overhead: The various expenses of operating a business that cannot be charged to any specific product, process, or department

Extracted From

MacKenzie, I. (2002). English for Business Studies: A course for Business Studies and Economics students (2nd ed.). Cambridge University Press.