Accounting and Financial Statements
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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.

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Founder and Author at Superb Future. Babu is a student of Business specializing in Sales and Marketing Management. "Everyone is a marketer, whether you are a businessman or a homemaker."


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