Finance & Accounting Glossary

28 terms

• IFRS

  The global standards framework for preparing financial statements.

  I

  Reporting Standards

• GAAP

  The accounting framework commonly used by US-based companies.

  G

  Reporting Standards

• Income Statement (P&L)

  Shows revenue, expenses, and profitability over a period.

  I

  Financial Statements

• Balance Sheet

  Shows assets, liabilities, and equity at a point in time.

  B

  Financial Statements

• Cash Flow Statement

  Classifies cash inflows and outflows by operating, investing, and financing activity.

  C

  Financial Statements

• EBITDA

  Operating profitability before depreciation and financing effects.

  E

  Performance Metrics

• EBIT

  Operating profit before interest and tax effects.

  E

  Performance Metrics

• Revenue Recognition

  Rules that determine when and how revenue is recorded.

  R

  Accounting Operations

• Accounts Receivable

  Amounts owed by customers for delivered goods or services.

  A

  Accounting Operations

• Accounts Payable

  Amounts owed to suppliers for goods and services received.

  A

  Accounting Operations

• Working Capital

  Short-term assets minus short-term liabilities.

  W

  Corporate Finance

• Gross Margin

  Profitability after direct costs of sales.

  G

  Performance Metrics

• Net Income

  Profit or loss after all revenues and expenses.

  N

  Performance Metrics

• COGS

  Direct costs of producing or delivering sold products and services.

  C

  Accounting Operations

• Depreciation & Amortization

  Allocation of asset cost over useful life.

  D

  Accounting Operations

• Accrual Accounting

  Records revenue and expenses when earned or incurred, not when cash moves.

  A

  Accounting Operations

• General Ledger

  The master ledger containing all account balances and entries.

  G

  Accounting Operations

• Chart of Accounts

  Structured list of account codes used in accounting records.

  C

  Accounting Operations

• Consolidation

  Combining parent and subsidiaries into one set of financial statements.

  C

  Corporate Finance

• Intercompany Elimination

  Removal of intra-group sales and balances in consolidation.

  I

  Corporate Finance

• ROE & ROA

  Profitability ratios measuring equity and asset efficiency.

  R

  Performance Metrics

• Shareholders' Equity

  Assets minus liabilities; owners' residual interest.

  S

  Financial Statements

• Variance Analysis

  Comparison of actual results against budget or forecast.

  V

  Corporate Finance

• Fiscal Year

  The reporting and budgeting cycle start and end dates.

  F

  Compliance & Audit

• Audit Trail

  Traceable record of changes to accounting entries.

  A

  Compliance & Audit

• Internal Controls

  Processes that safeguard assets and ensure reliable financial reporting.

  I

  Compliance & Audit

• Provisions

  Estimated liabilities for uncertain future outflows.

  P

  Accounting Operations

• FX Translation

  Converting foreign-currency balances into reporting currency.

  F

  Corporate Finance