Balance Sheet (BS)Ī balance sheet is a financial statement that states a company’s assets, liabilities, and shareholders’ equity.
Generally, those assets could be cash, accounts receivable, or inventory.įixed assets are long-term and will likely provide benefits to a company for more than one year, such as real estate, land, or significant machinery. Asset (fixed and current) (FA, CA)Ĭurrent assets are benefits that will be converted to cash within one year. The technique follows the matching principle, which says that revenues and expenditures should be recognized in the same period. Accrual AccountingĪccrual accounting is a method where income or expenses are recorded when a transaction occurs rather than when payment is received. Accounting cycles track accounting activities-all within unique accounting periods-from when the transactions first occur to when they conclude. Businesses and investors evaluate financial performance by comparing different accounting periods over time.
DEBIT CREDIT ABBREVIATION SERIES
Accounting PeriodĪn accounting period refers to the time at which a series of financial statements are issued. On a balance sheet, AP is listed as a current liability. In a company, an AP department is responsible for making payments owed by the company to suppliers and other creditors. Accounts Payable (AP)Īccounts payable is similar to accounts receivable, but instead of money to be received, it’s money owed. On the balance sheet, AR appears under current assets.
They are created when a company lets a customer purchase their goods or services on credit. Accounts Receivable (AR)Īccounts receivable is the balance of money owed by customers for a company’s goods or services. These are just a few of the most common and basic terms that students and professionals should be familiar with. By getting acquainted with these top accounting terms, you can become much more comfortable with the accounting process. Liability (current and long-term) (CL, LTL)ĭuring your accounting studies, you’ll likely run into various unfamiliar words, phrases, and acronyms.Generally Accepted Accounting Principles (GAAP).
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