Whether you are an accountant who is learning English as a second language, or you are a person who has moved to an English speaking country, knowing some basic accounting terms and phrases can be very helpful. Here are some important accounting vocabulary, whether it be for your job or for your personal life.
1. Bookkeeper
A person whose job it is to keep the financial records for a company. It can be for a large company or a small company. A bookkeeper may or may not be a trained accountant. It is possible that they do not have any formal training at all.
Their main function is to record the money that comes in versus the money that goes out. Some bookkeepers who have a wider range of skills may be asked to do more. A bookkeeper is also often responsible for paying bills or making sure that they get paid.
Most bookkeepers are not certified public accountants,so any financial statements that they prepare are usually reviewed by an accountant.
- Now that we have a new office and have doubled the number of people we employ, it’s time to get a bookkeeper.
- As a bookkeeper, I pay the bills for our company, prepare financial statements, and meet with our accountant quarterly.
2. Auditor
A person who specializes in verifying financial compliance, accounts, and accounting practices in a company, organization, or for an individual person.
Large companies, especially those who work in the finance industry may employ an antire department of auditors to ensure that members of the company are complying with government and company accounting regulations.
Governments employ auditors to ensure that it’s citizens are correctly filing their taxes. Some small companies may have one person who audits, or checks their accounting or they may hire an outside firm to do it.
- The auditor wrote up the discrepancies that she had found in the department’s books.
- As an auditor, it is important that I am aware of all of the new federal regulations.
3. Assets
In accounting terms this refers to property owned by a person or a company that is regarded has having value that could be used to meet one’s debts, commitments, or legacies. This includes anything that a company owns that it could sell.
It also includes cash, accounts receivable, property, and goods owned by the company. It’s important to note, that if more money is owed on something than it could be sold for, then it is not an asset. This includes property or fancy equipment.
- Our company has a lot of assets, but they can’t all be turned into cash quickly.
- What are your personal assets?
4. Liabilities
These include everything or everyone that a company owes money on or to. This can include mortgages on property, payroll, accounts payable, or any other loans.
- Our liabilities are currently greater than our assets.
- The company has a large amount of liabilities in the form of money owed for goods.
5. Accounts Payable
This refers to money that a company has to pay to creditors. This includes money owed to employees, other companies or creditors. These are liabilities. This is money that goes out.
- If the accounts payable are more than the accounts receivable then we’re in trouble.
- Since we paid off our main creditor last month our accounts payable have gone down significantly.
6. Accounts Receivable
This is money that is owed to a company. This is money that is coming in. This is money received by customers who have bought the company’s products or services.
- With the opening of the new store our accounts receivable have skyrocketed.
- How are our accounts receivable looking for the month?
7. Debit
This refers to an amount of money that a company owes, or the amount of money that they have spent.. This is located on the left hand side of an accounting sheet. This is the money going out.
- Please enter the bills under the debit column on the spreadsheet.
- There are discrepancies of the debits for the company.
8. Credit
In accounting terms, this shows how much money a company receives. This is traditionally on the right side of a financial sheet. This is the money coming in.
- Our credits for this money are more than are debits, so we are in the black.
- We are expecting increased credits this week, because we will get paid by people who owe us money.
9. Balance Sheet
This refers to a document that records a company’s assets, liabilities, and capital at a particular moment in time. If shareholders have equity in the company, then this may be shown on the balance sheet as well. Balance sheets are usually distributed or due periodically within a company, often quarterly.
- Every quarter we must report certain numbers on our balance sheet.
- All of the debit and credits must be correct in order to get accurate numbers on the balance sheet.
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