Payroll & Accounting Glossary

Free Online Glossary & Definitions For Accountancy Jargon

Financial Employee



Understanding all the complicated terminology involved in payroll and accounting can be difficult, but we don't think it should be.

In this spirit, we've compiled this handy guide to the most commonly used accounting terms for your reference.

Accounting Terms Beginning With "A"

A Shares

In the USA, the most important class of ordinary shares.


A description of property or a person that is in the best condition.


An ancient device used for performing arithmetic calculations; by sliding beads along rods or within grooves.


The act of abandoning something or someone.


Noun: the action of being abated or abating: subsiding or ending.

Law: the removal or reduction of a nuisance.

Abatement Cost

The abatement cost is a cost that is paid by a business when they have been asked to reduce or remove any negative by products or negative nuisances that are created during, at or after the time of production.

Abbreviated Accounts

Shortened but audited financial statement that a qualifying small or medium firm was allowed to file with registrar of companies in the UK.


This error message refers to a system crash or other abnormal termination of a computer program, caused by a memory conflict or some other (usually unidentifiable) glitch.

Abnormal Loss

A loss arising from a manufacturing or chemical progress in excess of normal loss.

Abnormal Losses

Losses arising in business that should have been avoided.

Above The Line

The “line” generally refers to gross profit. Above that line on the income statement, typically, are sales and COGS (cost of goods sold) or COS (cost of sales or cost of services). Below the line are operating expenses, interest, and taxes.

Abridged Accounts

Abridged accounts are general purpose financial statements intended for both company members and publication.   


repeal or do away with (a law, right, or formal agreement).


To assimilate or incorporate amounts in an account or group of accounts so that they are absorbed and lose their identity.

Absorbed Overhead

Absorbed overhead is manufacturing overhead that has been applied to products or other cost objects. Overhead is usually applied based on a predetermined overhead allocation rate.


An accounting process used in absorption costing in that the overhead of an organisation is borne by the production of that organisation by the use of absorption rates.

Absorption Account

1. Ledger account absorbed into other accounts in the preparation of a financial statement. 2. Account that shows the amount of overhead borne by (charged against) the volume of production.

Absorption Costing

A method of calculating the cost of a product or enterprise by taking into account indirect expenses (overheads) as well as direct costs.

Absorption Rate

In absorption costing, production may be expressed in a number of different ways; the way chosen to express production will ultimately determine the absorption rate to be used. The seven main methods of measuring production, together with their associated absorption rates, are detailed below. The absorption rate is used in the accounting period to obtain

Abuse Of A Dominant Position

Intentional anti-competitive acts by persons/companies substantially in control of a market, that has had, is having, or is likely to have the effect of preventing or lessening competition.

Abusive Language

Abusive language is defined as the use of language in a way which insults, taunts, or challenges another.

Abusive Tax Shelter

Abusive Tax Shelter is an investment scheme that claims to reduce income tax without changing the value of the user’s income or assets

Accelerated Depreciation

Method that records greater depreciation than straight-line depreciation in the early years and less depreciation than straight-line in the later years of an asset’s holding period.


The action of a lender in demanding early repayment when a borrower defaults on a debt.

Acceptance Credit

A means by which international trade is financed. Under this arrangement, a bank (or an acceptance House) in the exporter’s country set up an acceptance credit facility (similar to a checking account) on behalf of a credit-worthy importer. The exporter may then draw on this account up to its limit. Also known as acceptance financing.

Acceptance Supra Protest

In contracts, is a third person, who, after protest for non-acceptance by the drawee, accepts the bill for the honour of the drawer, or of the particular endorser.


The acceptor is the third party who accepts responsibility for payment in a bill of exchange. The bill of exchange will generally have three parties: the drawor, the drawee and the acceptor.

Access Provider

A company providing services to enable an organisation or individual to access the Internet.

Accident Forgiveness

Accident forgiveness is a feature of an auto insurance policy that protects your driving record from being affected by the insurance company’s rating system for an at-fault accident, thus preventing your insurance premium from going up because of an at-fault accident.

Accident Proneness

The apparent propensity of some individuals to suffer (or cause) more than an average volume of accidents. This is of particular interest in industrial and organisational psychology, which is anxious to analyse the causes of accidents in the workplace in order to reduce their occurrence and their inevitable costs. There is, however, some doubt as

Accommodation Bill

A bill of exchange endorsed by a reputable third party acting as a guarantor, as a favour and without compensation.

Accommodation Party

An Accommodation Party is a person who signs a negotiable instrument or commercial paper or agreement for the purpose of being a surety for another party (known as the accommodated party) to the instrument to help the accommodated party obtain a loan or an extension of credit.


Accountability is the obligation to give an account.

Accountancy Firm

A business partnership (or possibly a limited company) in which the partners are qualified accountants. The firm undertakes work for clients in respect of audit, accounts preparation, tax and similar activities.

Accountancy Profession

The collective body of persons qualified in accounting, and working in accounting-related areas. Usually they are members of a professional body, membership of which is attained by passing examinations.


The process of identifying, measuring and communicating financial information about an entity to permit informed judgements and decisions by users of the information.

Accounting Council

A body established in 2012 to take over certain functions of the former Accounting Standards Board. The main role of the council is to advise its parent body, the Financial Reporting Council (FRD), on matters of accounting and financial reporting policy. The responsibility for issuing Financial Reporting Standards now belongs to the FRC, although the

Accounting Equation

The relationship between assets, liabilities and ownership interest.

Accounting Event

A transaction or change (internal or external) recognised by the accounting recording system.

Accounting Period

Time period for which financial statements are prepared (e.g. month, quarter, year).

Accounting Policies

Accounting methods which have been judged by business enterprises to be most appropriate to their circumstances and adopted by them for the purpose of preparing their financial statements.

Accounting Series Release

In the USA, the former name for a Financial Reporting Release.

Accounting Standards

Definitive statements of best practice issued by a body having suitable authority.

Accounting Standards Board

The authority in the UK which issues definitive statements of best accounting practice.

Accounting Standards Committee

Membership of the Accounting Standards Committee was both part-time and unpaid. In 1990 and as a result of serious doubts concerning the effective of the committee’s effectiveness – the committee was replaced by the Accounting Standards Boards. Within it’s lifetime the ASC issued a total of 25 Statements Of Standard Accounting Practice (SSAPs), a number

Accounting System

An accounting system is the system used to manage the income, expenses, and other financial activities of a business.

Accounting Technician

Another name for a book-keeper.


Financial statements prepared at the end of a period to reflect the profit of loss or the period and financial position at the end of the period.

Accounts Payable

Amounts due for payment to suppliers of goods or services, also described as trade creditors.

Accounts Receivable

Amounts due from customers, also described as a trade debtors.


In accounting, accretion is the change in the price of a bond bought at a discount to the par value of the bond.


The accruals process allows a business to adjust the monthly accounts for payments made in arrears. This process is the reverse of prepayments.

Accrual Accounting

An accounting method that tries to match the recognition of revenues earned with the expenses incurred in generating those revenues. It ignores the timing of the cash flows associated with revenues and expenses.

Accruals Basis

The effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate (see also matching).

Accumulated Depreciation

Total depreciation of a non-current (fixed) asset, deducted from original cost to give net book value.

Acid Test Ratio

The ratio of liquid assets to current liabilities.

Acknowledged Child

A child that is recognised by the parent as their own.


Company that becomes controlled by another.


Company that obtains control of another.


An acquisition takes place where one company – the acquirer – acquires control of another – the acquiree – usually through purchase of shares.

Acquisition Method

Production of consolidated financial statements for an acquisition.

Actio Bone Fidei

An action of good faith or a group of actions where the judge is authorised to take into account equitable considerations.

Activist Shareholders

An activist investor is an individual or group that purchases large numbers of a public company’s shares and/or tries to obtain seats on the company’s board with the goal of effecting a major change within the company.

Activity Analysis

In activity-based costing, the identification and description of activities in an organisation.


Commodities that can be purchased and used, as opposed to goods traded on a futures contract. (or) Expenses or receipts that have actually occurred, as opposed to targets, budgets, or other projections.

Actuarial Assumptions

An actuarial assumption is an estimate of an uncertain variable input into a financial model, normally for the purposes of calculating premiums or benefits.

Actuarial Method

Actuarial Method is the process of distributing payments made on a debt between the amount provided as fund and also to the finance charge in accordance to which a payment is used first to the appended finance charge.

Ad Hoc Committee

An Ad Hoc Committee is a temporary committee formed for a specific task or objective and dissolved after the completion of the task or achievement of the objective.

Ad Testificandum

A subpoena ad testificandum is a court summons for one to appear and give verbal testimony for use at a hearing or trial.

Ad Valorem

In proportion to the estimated value of the goods or transaction concerned.


A person who is addicted, especially to a harmful drug.

Additional Paid-In Capital

Additional Paid-In Capital (APIC) is the value of share capital above its stated par value and on the balance sheet is an accounting item under Shareholders’ Equity.


Ademption is the situation, where a property bequeathed to a person at the time of writing of a will, cannot be transferred to him or her upon the death of the will-maker (testator) because it is no longer belongs to the testator’s estate. Ademption may be a result of the destruction, loss, or sale of


Adhocism is an organisational philosophy/style characterised by: an aversion to planning, a tendency to respond only to the urgent, as opposed to the important, a focus on ‘fire fighting,’ than on establishing systems and procedures through goal setting and long term planning.


Adjudication is the legal process by which an arbiter or judge reviews evidence and argumentation, including legal reasoning set forth by opposing parties or litigants to come to a decision which determines rights and obligations between the parties involved.

Adjusted Gross Income

In the USA, the difference between the gross income of a taxpayer and the adjustments to income.

Administrative Expenses

Costs of managing and running a business.

Adopted Child

adoption – a legal proceeding that creates a parent-child relation between persons not related by blood; the adopted child is entitled to all privileges belonging to a natural child of the adoptive parents (including the right to inherit)

Advice Note

A document issued by a supplier of goods that advises the customer that the goods have been sent.


A person who makes a voluntary declaration of facts in a written statement and signs it under oath.


A person or organisation officially attached to a larger body.

Affirmation Of Fact

An affirmation of fact is a statement of fact or promise made as part of a bargain.

Affirmative Action

A principle underlying policies in employment and education aimed at ensuring equal opportunities for all.

Against The Will

Against the will is a phrase which means contrary to a person’s wishes. The phrase is used in indictments to demonstrate that a defendant’s conduct was without the victim’s consent. For example, indictments for sexual molestation will contain the words “feloniously and against the will to sufficiently charge the offence.

Aged Debtors

Debtors who have owed money to the business for a defined period of time.

Aged Debtors Analysis

A report that analyses amounts owed by customers according to the length of time that those amounts have remained unpaid. For example, all customers who have outstanding invoices that are over a month old.


A relationship between a principal and an agent. In the case of a limited liability company, the shareholder is the principal and the director is the agent.

Agency By Estoppel

The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorised to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if

Agency Theory

A theoretical model, developed by academics, to explain how the relationship between a principal and an agent may have economic consequences.


An agent is a person appointed by another person, known as the principle, to act on his or her behalf.


An aggregator is a firm that collates and presents information about an individual’s financial activities and assets.

Agreed Bid

A takeover bid that is supported by a majority of the shareholders of the target company.

Agreed Cost

Regarding auto insurance, the price agreed to by the claimant’s chosen auto repair shop and the insurance adjuster to complete the work necessary to fix the damage to a vehicle.

Agreed Value

Concerning vehicle insurance, The Agreed Value is the amount your insurer agrees to pay you in the event your vehicle is written off in a crash.

Alcoholic Beverage

Any drink that contains alcohol and includes wine, beer, spirits and liqueurs.

Alimony Payment

An alimony payment is a periodic pre-determined sum awarded to a spouse or former spouse following a separation or divorce. Alimony is an obligation to make payments for support or maintenance; an alimony payment is the actual sum paid to fulfil the obligation.


To assign a whole item of cost, or of revenue, to a simple cost centre, account or time period.

Allotted Shares

Shares distributed by allotment to new shareholders.


Characteristic of a cost that permits its inclusion in a cost-plus type contract, and depends on: its reasonableness its allocability provisions of GAAP. practices appropriate under the circumstances, and the terms of the contract.


A group of people who have graduated from a school or university.


Unclear or uncertain.

American Option

This is an option that can be exercised on any business day prior to it’s expiry date.


Process similar to depreciation, usually applied to intangible fixed assets.

Amortisation Schedule

An amortisation schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.

Amortising Loan

An amortising loan is a loan with scheduled periodic payments that are applied to both principal and interest. An amortised loan payment first pays off the relevant interest expense for the period, after which the remainder of the payment reduces the principal.

Amount Due

Refers to the total sum of money due for the purchase of a good or service that must be paid by the set due date.

Analysis Of Variance

In standard costing and budgetary control this refers to the analysis of variances in order to determine their causes. The total profit variance or production cost variance is analysed into sub-variances to indicate the major reasons for differences between budgeted figures and actual outcomes.

Analytical Auditing

Analytical auditing is simply using analytical procedures whilst auditing to allow the auditor to understand the business, and changes to a clients business.

These analytical procedures are part of the many tools an auditor will use, and can help to highlight areas of concern or areas of growth.

Analytical Review

Analytical review is an auditing procedure that uses ratios to determine whether any significant changes have taken place.

Annual Investment Allowance (AIA)

A tax allowance up to the value of £200,000 each tax year, which can be offset against corporation tax when your company buys assets.

Annual Percentage Rate (APR)

The annual equivalent rate of return on a loan or investment in which the rate of interest and charges are specified in terms of an annual rate of interest. Most investment institutions are now required by law to specify the APR when the interest intervals are more frequent than annually.

Annual Report

A document produced each year by limited liability companies containing the accounting information required by law. Larger companies also provide information and pictures of the activities of the company.


Annualization is a tool which is used to predict the annual amount of something using only the data from part of the year.


An annuitant is a person who is entitled to receive benefits from an annuity. Since 2000, in the United States of America, Federal and State agencies have allowed the re-hiring of retired employees without the loss of their retirement benefits.


An income-generating investment whereby, in return for the payment of a single lump sum, the annuitant receives regular amounts of income over a predefined period.

Annuity Certain

An annuity in which payments continue for a specified period irrespective of the life or death of the person covered.


Cancellation usually of a bankruptcy.

Answer Over

When you plead again after the defects in your presentation have been pointed out to you by the opposite party.

Antecedent Debt

A legally enforceable obligation, which has been in existence prior to the time in question, to reimburse another with money or property.


To date a document before the date on which it is drawn up.

Anti-Lock Brake System (ABS)

An anti–lock braking system (ABS) is a safety anti-skid braking system used on aircraft and on land vehicles, such as cars, motorcycles, trucks, and buses. ABS operates by preventing the wheels from locking up during braking, thereby maintaining tractive contact with the road surface.

Anti-Theft Device

A range of technologies intended to deter auto theft, such as a car alarm. Equipping vehicles with anti-theft devices often lead to a discount on insurance premiums.

Application Form
Applications Software

Applications software are computer programs that are design for a specific purpose or application. 


Apportionment is an allocation based on some proportions. The legal term apportionment means distribution or allotment in proper shares. Most often apportionment pertains to the allocation of a loss between all of the insurance companies that insure a piece of property.

Appraisal Definition

A method of depreciation that values an asset at the beginning of an accounting period and again at the end.


An act or instance of appraising something or someone; especially: the valuation of a property by the estimate of an authorised person.

Appropriation Accounts

These show the way that net profit is distributed (usually in the form of cash dividends) between partners in a partnership or between shareholders and reserve funds in a company.


In arbitration an independent third party considers both sides in a dispute, and makes a decision to resolve it.

Articles Of Association

Document setting out the relative rights of shareholders in a limited liability company.


The term ‘articulation’ is used to refer to the impact of transactions on the balance sheet and profit and loss account through application of the accounting equation.

Artificial Person

An entity that is recognised by the law as a legal person.

As Per Advice

As Per Advice are the words written on a bill of exchange to indicate that the drawee has been informed that the bill is being drawn on him or her.

Asset Cover

The Asset Coverage Ratio measures the ability of a company to cover it’s debt obligations with it’s assets.

Asset-Backed Security

An asset-backed security (ABS) is a financial security collateralised by a pool of assets such as loans, leases, credit card debt, royalties or receivables.


Rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.

Assignable Error

An error that has occurred during a trial that can be used and referred to should an appeal be deemed necessary.


An assignor is the party that transfers a property or right (with their associated obligations and rights) to another (the assignee) under an assignment.

Associated Company

One company exercises significant influence over another, falling short of complete control.


Insurance against an eventuality that must occur.

At Fault

responsible for an undesirable situation; in the wrong.

At Sight

The words used on a bill of exchange to indicate that payment is due on presentation.


As a witness, to attest means to affirm an act or event as true. Documents are legally attested when they are signed by the involved parties in the presence of a witness who also signs the documents.


Attn is an abbreviation for attention.


Expressed or implied consent to a transfer of right, such as where a tenant accepts to be a tenant of a new landlord by continuing to occupy the leased or rented property after its sale.


The unpredictable and uncontrollable, but normal, reduction of the workforce due to resignations, retirement, sickness, or death. The Loss of a material or resource due to obsolescence or spoilage. The process of reducing something’s strength or effectiveness through sustained attack or pressure.


An audit is the independent examination of, and expression of opinion on, financial statements of an entity.

Audit Manager

An employee of an accountancy firm, usually holding an accountancy qualification, given a significant level of responsibility in carrying out an audit assignment and responsible to the partner in charge of the audit.

Audit Manual

A written document that explains the auditing policies and procedures of a firm.

Authorised Share Capital

The total value of shares that the company could issue, as distinct from the up and paid up share capital.


Autonomation is a technological innovation that aims to allow machines to work harmoniously with their operators by giving them the ‘human touch.’ Known as Jidoka in Japanese, the approach utilises automatic and semi-automatic processes to reduce the physical and mental load on workers. The concept was introduced by the founder of Toyota Industries Corp, Sakichi

Average Total Cost

In economics, average cost or unit cost is equal to total cost divided by the number of units of a good produced: It is also equal to the sum of average variable costs and average fixed costs. Average costs may be dependent on the time period considered.

Average Variable Cost

The average variable cost (AVC) is the total variable cost per unit of output. This is found by dividing total variable cost (TVC) by total output (Q).

Away From The Market

An Away-from-the-market (AFTM) order is a limit order where the buy limit order is lower or the sell limit order is higher than the current market price.

Accounting Terms Beginning With "B"


A customer order that cannot be filled when presented, and for which the customer is prepared to wait for some time. The percentage of items back-ordered and the number of backorder days are important measures of the quality of a company’s customer service and the effectiveness of its inventory management.

Bad Debt

It is known that a credit customer (debtor) is unable to pay the amount due.

Balance Sheet

A statement of the financial position of an entity showing assets, liabilities and ownership interest.

Bank Facility

An arrangement with a bank to borrow money as required up to an agreed limit.

Bank Reconciliation

This refers to comparing the business’ bank balance with a bank statement to spot differences.


The name sometimes given to loan finance (more commonly in the USA).

Book Value

The book value of an asset or group of assets is the price at which they were originally acquired, in many cases equal to purchase price.


Boulwarism was named after General Electric’s former vice president Lemuel Boulware, who pioneered the strategy.

Broker (Stockbroker)

Member of a stock exchange who arranges purchase and sale of shares and may also provide an information service giving buy/sell/hold recommendations.

Broker’s Report

Bulletin written by a stockbroking firm for circulation to its clients, providing analysis and guidance on companies as potential investments.


A business is an organisation or economic system where goods and services are exchanged for one another or for money.

Business Combination

A transaction in which one company acquires control of another.

Business Continuity Plan

A business continuity plan is usually a separate document, associated with larger organisations. It sets out a range of procedures for dealing with issues, in the event of a major problem or disaster situation, to minimalise interruption to the business. Such events would include fire, flooding, electrical or gas faults, accidents with hazardous materials, even

Business Cycle

Period (usually 12 months) during which the peaks and troughs of activity of a business form a pattern which is repeated on a regular basis.

Business Entity

A business which exists independently of it’s owners.

Accounting Terms Beginning With "C"


A Pool-side hotel room, with our without a bed.


The carriage of cargo between two points within a country by a vessel or vehicle which is registered in another country. Permission to engage in cabotage is, normally, strictly restricted in every country.


In the textiles industry, Calendering is a finishing process used to smooth, coat, or thin a material.

Called Up

The company has called upon the shareholders who first bought the shares, to make their payment in full.


Camaraderie is a sense of trust, loyalty and goodwill that has developed between people who have known each other for a significant period of time. This can be evident in a workplace or a service unit with people who work well together for a common or mutual goal.


An amount of finance provided to enable a business to acquire assets and sustain it’s operations.

Capital Allowances

Capital allowances is the practice of allowing a company to get tax relief on tangible capital expenditure by allowing it to be expensed against it’s annual pre-tax income.

Capital Expenditure

Spending on non-current (fixed) assets of a business.

Capitalisation Issue

Issue of shares to existing shareholders in proportion to shares already held. Raises no new finance but changes the mix of share capital and reserves.


Cash on hand (such as money held in a cash box or a safe) and deposits in a bank that may be withdrawn on demand.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash Flow Projections

Statements of cash expected to flow into the business and cash expected to flow out over a particular period.

Cash Flow Statement

Provides information about changes in financial position.


The person who chairs the meetings of the board of directors of a company (preferably not the chief executive).


In relation to interest or taxes, describes the reduction in ownership interest reported in the income statement (profit and loss account) due to the cost of interest and tax payable.

Charge Back

When a cardholder cancels a credit or debit card transaction before it has been processed. When a chargeback occurs many banks charge the seller a fee.

Chart of Accounts

A list of all of the accounts that are held in which business transactions are classified and recorded.

Chief Executive

The director in charge of the day-to-day running of a company.


Attrition or turnover of customers of a business or users of a service. In the new economy (which provides unprecedented choice, and instant and global access to products and information) churn rate determines business earnings and growth. A firm has to earn and re-earn every day the loyalty of its customers.

Circulating Assets

Assets that turn from cash to goods, and then back to cash again. Examples include purchasing materials to build a product; manufacturing the product (which results in stock); and selling the stock for cash.

Civil Wrong

an infringement of a person’s rights, especially a tort.


1. General: Satisfaction of the requirements of a due process. 2. Banking: See check clearing. 3. Futures and options: Procedure through which a clearinghouse acts as a counter-party to every trade and assures financial integrity of each contract. 4. Importing: Release of a shipment after approval of its shipping documents and customs entry, and payment


Clintonomics (which is a portmanteau of “Clinton” and “economics”) encapsulates the economic policies of the US President Bill Clinton that were implemented during his presidency.

Close Season

Period during which those who are ‘insiders’ to a listed company should not buy or sell shares.

Closing the Books

A term used to describe making the final entries, and balancing the profit and loss account at the end of the financial year.


the activity of buying and selling, especially on a large scale.

Commercial Paper

A method of borrowing money from commercial institutions such as banks.


A reasonably interchangeable good or material bought and sold freely as an article of commerce. Commodities include agricultural products, fuels, and metals and are traded in bulk on a commodity exchange or spot market.

Companies Act

The Companies Act 1985 as modified by the Companies Act 1989. Legislation to control the activities of limited liability companies.

Companies House

A UK government department that collects and stores information regarding limited companies. Registered businesses must provide a statement at the end of each financial year.


Qualitative characteristic expected in financial statements, comparable within company and between companies.


A conflict management style that emphasises assertiveness and minimises cooperation.


Qualitative characteristic expected in financial statements.

Compound Interest

When interest is applied to capital and accrued up until that particular date. For example, a £1,000 loan with 20% interest will have a balance of £1,200 after the first year, then £1,440 at the end of the second year.

Concentric Diversification

A growth strategy in which a company seeks to grow and develop by adding new products to its existing product lines to attract new customers.

Conceptual Framework

A statement of principles providing generally accepted guidance for the development of new reporting practices and for challenging and evaluating the existing practices.


Concessionality is the extent to which the terms of a soft (below market rates) loan reduce a lender’s returns in comparison with a loan of the same amount and duration as the soft loan advanced at full market rates.


Sometimes used with a stronger meaning of understating assets and overstating liabilities.

Consignment Shop

A Consignment shop is a specific type of shop, usually second-hand, that sells used goods on the behalf of the owners of the products.


Person or firm (usually the seller) who delivers a consignment to a carrier for transporting it to a consignee (usually the buyer) named in the transportation documents. Ownership (title) of the goods remains with the consignor until the consignee pays for them in full.


The measurement and display of similar transactions and other events is carried out in a consistent way throughout an entity within each accounting period and from one period to the next, and also in a consistent way by different entities.

Consolidated Financial Statements

Present financial information about the group as a single reporting entity.


Consolidation is a process that aggregates the total assets, liabilities and results of the parent and its subsidiaries (the group) in the consolidated financial statements.

Construct Validity

Construct validity refers to the degree to which inferences can legitimately be made from the operationalisations in your study to the theoretical constructs on which those operationalisations were based. Like external validity, construct validity is related to generalising.

Contingent Liabilities

Obligations that are not recognised in the balance sheet because they depend upon some future event happening.


A project owner or other entity that enters into a contract with a contractor/vendor and receives specified goods and/or services under the terms of the contract.


The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Conversion Balances

This refers to transferring bookkeeping records between accounting software programs. It involves taking closing balances from the previous software and entering it into the new software as opening balances.

Convertible Loan

Loan finance for a business that is later converted into share capital.


Convexity is a measure of the curvature, or the degree of the curve, in the relationship between bond prices and bond yields. Convexity demonstrates how the duration of a bond changes as the interest rate changes.

Corporate Governance

The system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.

Corporate Recovery Department

Part of an accountancy firm which specialises in assisting companies to recover from financial problems.

Corporate Social Responsibility

Companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders.

Corporation Tax

Tax payable by companies, based on the taxable profits of the period.


The cost of a non-current asset is the cost of making it ready for use, cost of finished goods is cost of bringing them to the present condition and location.

Cost Of Goods Manufactured

The cost of goods manufactured is a calculation of the production costs of the goods that were completed during an accounting period.

Cost Of Goods Sold

Materials, labour and other costs directly related to the goods or services provided.


Rate of interest payable on a loan.

Credit (Bookkeeping System)

Entries in the credit column of a ledger account represent increases in liabilities, increases in ownership interest, revenue, or decreases in assets.

Credit (Terms Of Business)

The supplier agrees to allow the customer to make payment some time after the delivery of the goods or services. Typical trade credit periods range from 30 to 60 days but each agreement is different.

Credit Note

A document sent to a customer of a business cancelling the customer’s debt to the business, usually because the customer has returned defective goods or has received inadequate service.

Credit Purchase

A business entity takes delivery of goods or services and is allowed to make payment at a later date.

Credit Sale

A business entity sells goods or services and allows the customer to make payment at a later date.


A person or organisation to whom money is owed by the entity.

Critical Event

The point in the business cycle at which revenue may be recognised.

Cross Default Clause

A cross-default clause is common stipulation under loan agreements in which a bank has a right to deny access to balances in any or all loan accounts to a borrower (with several loans at the same bank) even if only one loan goes into default. In fact, a bank can apply all available balance(s) in

Current Asset

An asset that is expected to be converted into cash within the trading cycle.

Current Liability

A liability which satisfies any of the following criteria: (a) it is expected to be settled in the entity’s normal operating cycle; (b) it is held primarily for the purpose of being traded; (c) it is due to be settled within 12 months after the balance sheet date.

Current Value

A method of valuing assets and liabilities which takes account of changing prices, as an alternative to historical cost.


Curtesy tenure is the legal term denoting the life interest which a widower may claim in the lands of his deceased wife, under certain conditions. The tenure relates only to those lands of which his wife was in her lifetime actually seised and not therefore to an estate of inheritance


In sales, commerce and economics, a customer is the recipient of a good, service, product or an idea – obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration.

Customers’ Collection Period

Average number of days credit taken by customers.

Cut-off Procedures

Procedures applied to the accounting records at the end of an accounting period to ensure that all transactions for the period are recorded and any transactions not relevant to the period are excluded.


Cyberslacking is a term used to describe the increased use of the internet on company computers by employees for their personal use or entertainment.


Stealing of financial and/or personal information through the use of computers for making its fraudulent or other illegal use.

Voided Check

Accounting Terms Beginning With "D"


In radio and TV broadcasting, fairly standard divisions (based on audience composition) of a 24-hour day for scheduling commercials.


A written acknowledgement of a debt – a name used for loan financing taken up by a company.

Debt To Total Assets Ratio

Debt-to-total-assets is a leverage ratio that defines the (total) amount of debt relative to assets.


A person or organisation that owes money to the entity.


Separating a ‘consolidated’ (usually containerised) shipment into its original constituent shipments, for delivery to their respective consignees. Also known as degroupage.


Purchases that are claimed as business expenses are described as deductible; they reduce business profits but reduce the amount of income tax owed.


An amount or part taken away from a total, especially an expense that you do not have to pay taxes on, or the process of taking away an amount or part.

Deep Discount Bond

A loan issued at a relatively low price compared to its nominal value.


Failure to meet obligations as they fall due for payment.

Deferred Asset

An asset whose benefit is delayed beyond the period expected for a current asset, but which does not meet the definition of a fixed asset.

Deferred Income

Revenue, such as a government grant, is received in advance of performing the related activity. The deferred income is held in the balance sheet as a type of liability until performance is achieved and is then released to the income statement.

Deferred Taxation

The obligation to pay tax is deferred (postponed) under tax law beyond the normal date of payment.

Demographic Factors

These are factors that are used to define the characteristics of a person or a population.


A Penalty for exceeding free time (usually 72 hours) allowed for taking delivery of a shipment from the shipping or transporting company’s warehouse. A penalty assessed against a consignor, consignee, or another such party responsible for delay in loading or unloading of a shipping vessel or for undue detention (usually over 48 hours) of the


Reducing the obligations on a contract.

Deposit Slip

A slip of paper that accompanies cash or cheque payment. It details the amount of the deposit, the bank account the funds should be paid into, and the date of deposit.

Depreciable Amount

Cost of a non-current (fixed) asset minus residual value.


The systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount is cost less residual value.


The act of removing an item from the financial statements because the item no longer satisfies the conditions for recognition.


A decrease in the quality and range of the practical knowledge of individuals, organisations, or societies due to attrition, automation, computerisation, downsizing, a lack of learning opportunities, or neglect.


Devanning is the act of unloading cargo from a container.

Devils Horns

The devil’s horn effect, closely related to the halo effect, is a form of cognitive bias that causes one’s perception of another to be unduly influenced by a single negative trait.


One who receives a gift of real property through a will. Also known as a distributee.


Division of one thing into two parts, normally differing or opposing; the state of being two-fold, having two different components. People can discuss the dichotomy of body and soul, men and women, or eastern and western culture.

Difference On Consolidation

Difference between fair value of the payment for a subsidiary and the fair value of net assets acquired, more commonly called goodwill.

Direct Method (Of Operating Cash Flow)

Presents cash inflows and cash outflows.


A document issued by the European Union requiring all Member States to adapt their national law to be consistent with the Directive.


Person(s) appointed by shareholders of a limited liability company to manage the affairs of the company.


The act of denying or contradicting a previous statement. Can also mean the refusal to abide by a formerly enacted contract or agreement.


the action of making new or secret information known.

Discount Received

A supplier of goods or services allows a business to deduct an amount called a discount, for prompt payment of an invoiced amount. The discount is often expressed a percentage of the invoiced amount.

Discretionary Fiscal Policy

In macroeconomics, a discretionary fiscal policy is an economic policy based on the ad hoc judgment of policymakers as opposed to a policy set by predetermined rules.


A participant in a discussion.


A medium which permits the consumer to purchase goods and services directly from the producer. This enables the consumer to cut costs as the middleman is eliminated from the supply chain. Online shopping is an example of a disintermediary because it allows manufacturers and consumers to interact directly with each other.

Displaced Homemaker

A homemaker is a person who maintains the upkeep of his or her residence, especially one who is not employed outside the home. A displaced homemaker describes someone who has been out of the paid workforce for years, usually raising a family and managing a household and its chores, without pay, during those years. The homemaker becomes

Distributive Fairness

The situation where employees receive what they assume they deserve from their work.


Amount paid to a shareholder, usually in the form of cash, as a reward for investment in the company. The amount of dividend paid is proportionate to the number of shares held.

Dividend Cover

Earnings per share divided by dividend per share.

Dividend Yield

Dividend per share divided by current market price.

Doubtful Debts

Amounts due from credit customers where there is concern that the customer may be unable to pay.


To restrict development in a given area. For example, a zoning board may allow only single-family housing units to be built in a certain neighbourhood, thus restricting the commercial development and allowed construction of apartment complexes.


A drawee is the entity that is expected to accept and pay a bill of exchange (check, draft, letter of credit, etc.) on presentation or on a certain date (called due date or maturity date).


Cash taken for personal use, in sole trader or partnership business, treated as a reduction of ownership interest.


Packing material such as boards, blocks, planks, metal or plastic bracing, used in supporting and securing packages for shipping and handling.

Accounting Terms Beginning With "E"


designate (funds or resources) for a particular purpose.

Earnings For Ordinary Shareholders

Profit after deducting interest charges and taxation and after deducting preference dividends (but before deducting extraordinary items).

Earnings Per Share

Calculated as earnings for ordinary shareholders divided by the number of shares which have been issued by the company.


An abbreviation for “earnings before interest and tax.”


An entrepreneur operating an environmentally sustainable business.

Effective Interest Rate

The rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument.

Efficient Markets Hypothesis

Share prices in a stock market react immediately to the announcement of new information.

Empirical Probability

In probability theory, the empirical probability is an estimated probability based upon previous evidence or experimental results. As such, the empirical probability is sometimes referred to as experimental probability, and we can distinguish it from probabilities calculated from a clearly-defined sample space. The empirical probability, relative frequency, or experimental probability of an event is the ratio of the number of outcomes in


International financial reporting standards approved for use in Member States of the European Union through a formal process of endorsement.


An endorsee is a person or firm to whom a negotiable instrument (bill of exchange, bill of lading, delivery order, or another document of title) is transferred by endorsement. Also called a transferee or payee, the endorsee becomes a holder-in-due-course upon delivery of the endorsed document.


A business activity or a commercial project.

Entry Price

The value of entering into acquisition of an asset or liability, usually replacement cost.


Tangible property (other than land or buildings) that is used in the operations of a business. Examples of equipment include devices, machines, tools, and vehicles.

Equities Analyst

A professional who investigates and writes reports on ordinary share investments in companies (usually for the benefit of investors in shares).


A description applied to the ordinary share capital of an entity.

Equity Accounting

Reports in the balance sheet the parent or group’s share of the investment in the share capital and reserves of an associated company.

Equity Portfolio

A collection of equity shares.

Equity Shares

Shares in a company which participate in sharing dividends and in sharing any surplus on winding up, after all liabilities have been met.


Short and minor revisions to a printed or published document to correct spelling and/or typing mistakes. In contrast to ‘addendum,’ an errata does not add to the text and, in contrast to ‘corrigendum,’ does not subtract from it.


Escrow is a contractual arrangement in which a third party receives and disburses money or property for the primary transacting parties, most generally, used with plentiful terms that conduct the rightful actions that follow.

Escrow Account

The basic concepts and fundamental principles of decent human conduct. It includes the study of universal values such as the gender equality, human or natural rights, obedience to the law of the  land, health & safety concerns and, increasingly, also for the natural environment. Related to: morality.

Eurobond Market

A market in which bonds are issued in the capital market of one country to a non-resident borrower from another country.

Exit Value

A method of valuing assets and liabilities based on selling prices, as an alternative to historical cost.


Expandability refers to the ability of a computer system to accommodate enhancements to its capacity or capabilities. From a hardware point of view, expandability may include extra or bigger hard disks, more memory, or a faster-dedicated graphics chip. From a software point of view, it may include the ability to support more network users, a


An expense is caused by a transaction or event arising during the ordinary activities of the business which causes a decrease in the ownership interest.

Explanatory Variable

An explanatory variable (also known as an independent variable), is a variable that can be manipulated so as to analyse the effect on another (or the dependent variable).

External Reporting

Reporting financial information to those users with a valid claim to receive it, but who are not allowed access to the day-to-day records of the business.

External Users (Of Financial Statements)

Users of financial statements who have a valid interest but are not permitted access to the day-to-day records of the company.

Accounting Terms Beginning With "F"


A factor is a characteristic that has been shown to contribute to market outperformance.


This means receiving funds instantly without having to wait for payment from a customer. A factoring company pays a percentage of the invoice to the business being paid, as much as 95%, and takes a cut of the cost.

Fair Value

The amount at which an asset or liability could be exchanged in an arm’s-length transaction between a willing buyer and a willing seller.

Faithful Presentation

Qualitative characteristic, information represents what it purports to represent.


The process in which the effect or output of an action is ‘returned’ (fed-back) to modify the next action. Feedback is essential to the working and survival of all regulatory mechanisms found throughout living and non-living nature, and in man-made systems such as education system and economy. As a two-way flow, feedback is inherent to

Financial Accounting

A term usually applied to external reporting by a business where that reporting is presented in financial terms.

Financial Adaptability

This refers to the ability of a company to respond to unexpected needs or opportunities.

Financial Gearing

Ratio of loan finance to equity capital and reserves.

Financial Information

Information which may be reported in money terms.

Financial Reporting Standard

Title of an accounting standard issued by the UK Accounting Standards Board as a definitive statement of best practice (issued from 1990 onwards – predecessor documents are Statements of Standard Accounting Practice, many of which remain valid).

Financial Risk

Exists where a company has loan finance, especially long-term loan finance where the company cannot relinquish its commitment. The risk relates to being unable to meet payments of interest or repayment of capital as they fall due.

Financial Statements

Documents presenting accounting information which is expected to have a useful purpose.

Financial Viability

The ability to survive on an ongoing basis.

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.


Direct experience that is derived from personal knowledge or which comes straight from its original source. Many experts believe that the most valuable and educational type of business or investment experience is that which is gained from firsthand observation and personal practice.


A fiscalist is someone who believes that fiscal policy is vital in economic regulation. A fiscalist, as opposed to a monetarist, is in favour of affecting the economy through fiscal policy.

Fixed Asset

An asset that is held by an enterprise for use in the production or supply of goods or services, for rental to others, or for administrative purposes on a continuing basis in the reporting entity’s activities.

Fixed Assets Usage

Revenue divided by net book value of fixed assets.

Fixed Capital

Finance provided to support the acquisition of fixed assets.

Fixed Cost

One which is not affected by changes in the level of output over a defined period of time.

Flea Market

A technique for scheduling broadcast commercials

Floating Charge

Security taken by lender which floats over all the assets and crystallises over particular assets if the security is required.


A willingness to accept direction and guidance from the leaders of an organisation.


Estimate of future performance and position based on stated assumptions and usually including a quantified amount.


The extent to which work roles are structured in an organisation and the activities of the employees are governed by rules and procedures.


A list of items which may appear in a financial statement, setting out the order in which they are to appear.

Forward Exchange Contract

An agreement to buy foreign currency at a fixed future date and at an agreed price.


Freepost is a postal service provided by various postal administrations, whereby a person sends mail without affixing postage, and the recipient pays the postage when collecting the mail.

Fully Paid

Shares on which the amount of share capital has been paid in full to the company.

Fund Manager

A finance professional who manages a collection (portfolio) of investments, usually for an insurance company, a pension fund business or a professional fund management business which invests money on behalf of clients.

Accounting Terms Beginning With "G"

Gains And Losses

This typically refers to losses due to foreign currency transactions. The fluctuation of exchange rates between the time a payment is made and when the bank converts the currency may result in a gain or loss.

General Ledger

General Ledger (GL) is a complete record of the financial transactions over the life of a company.

General Purpose Financial Statements

Documents containing accounting information which would be expected to be of interest to a wide range of user groups. For a limited liability company there would be: a balance sheet, a profit and loss account, a statement of recognised gains and losses and a cash flow statement.


The worldwide movement toward economic, financial, trade, and communications integration.

Going Concern Basis

The assumption that the business will continue operating into the foreseeable future.


Goodwill on acquisition is the difference between the fair value of the amount paid for an investment in a subsidiary and the fair value of the net assets acquired.


The eligible recipient of an easement, grant, or right, such as the one who is a beneficiary of a trust established by a grantor.


The level of detail considered in a decision-making process or model.


Before making deductions.

Gross Margin

Sales minus cost of sales before deducting administration and selling expenses (another name for gross profit). Usually applied when discussing a particular line of activity.

Gross Margin Ratio

Gross profit as a percentage of sales.

Gross Profit

Sales minus cost of sales before deducting administration and selling expenses (see also gross margin).


An Economic entity formed by parent and one or more subsidiaries.


A GRPI model includes measurable Goals, well-defined Roles and lists of what team members will fill what roles, a list of processes to achieve project sub-goals, and a plan for Interpersonal interactions that will facilitate problem-solving goal achievement.

Accounting Terms Beginning With "H"


The act of one who hedges (in various senses).


Having a structure consisting of multiple levels. A hierarchical business structure would mean that the chain of command looks like a pyramid, with a large base of workers, who are directly supervised by the smaller level above them, who are in turn supervised by the level above them, continuing on to the top ranking officer

Highlights Statement

A page at the start of the annual report setting out key measures of performance during the reporting period.

Hire Purchase

This refers to when equipment used by the business is paid off through a finance company. At the end of the lease period the company can pay a final fee to own it or start payments for a new piece of equipment.


Line-chart based on a histogram, it is drawn by joining the mid-points of the blocks at their apexes with a straight line. The extreme points of the line are joined to the horizontal (‘X’) axis (where the mid-point of the respective next class would have been) to result into a polygon. In a very large

Historical Cost

Method of valuing assets and liabilities based on their original cost without adjustment for changing prices.

HM Revenue And Customs (HMRC)

The UK government’s tax-gathering organisation (previously called the Inland Revenue).


A house mark was originally a mark of property, later also used as a family or clan emblem, incised on the facade of a building, on animals, in signet and similar in the farmer and burgher culture of Germany and Scandinavia.


Short for heating, ventilation, and air conditioning. The system is used to provide heating and cooling services to buildings. HVAC systems have become the required industry standard for construction of new buildings. Before the creation of this system, the three elements were usually split between three or more devices.


A collateralising arrangement in which neither the possession nor the title but only the right to sell an asset or property passes on to the creditor or lender (called a grantee). An arrangement where the grantee has the possession and right to sell, but not the title, is called pledging.

Accounting Terms Beginning With "I"


International Accounting Standard, issued by the IASB’s predecessor body.


International Accounting Standards Board, an independent body that sets accounting standards accepted as a basis for accounting in many countries, including all Member States of the European Union.

IASB System

The accounting standards and guidance issued by the IASB.


An offer to buy goods under specified terms and conditions; for example, for misuse.


International Financial Reporting Standard, issued by the IASB.


A situation or an object that bares such little importance (or relevance) that it will have no serious impact on the outcome or results of a situation.

Immediate Family

Someone’s spouse, parents and grandparents, children and grandchildren, brothers and sisters, mother in law and father in law, brothers in law and sisters in law, daughters in law and sons in law. Adopted, half, and step members are also included in the immediate family. See also, first-degree relative.


A reduction in the carrying value of an asset, beyond the expected depreciation, which must be reflected by reducing the amount recorded in the balance sheet.

Impairment Review

Testing assets for evidence of any impairment.

Impairment Test

Test that the business can expect to recover the carrying value of the intangible asset, through either using it or selling.


A change in, or addition to, a non-current (fixed) asset that extends its useful life or increases the expected future benefit. Contrast with repair which restores the existing useful life or existing expected future benefit.

Income Statement

Financial statement presenting revenues, expenses, and profit. Also called profit and loss account.

Incorporation Date

date of. The date on which a company comes into existence.

Indirect Method (Of Operating Cash Flow)

Calculates operating cash flow by adjusting operating profit for non-cash items and for changes in working capital.


Production methods that incur high fixed costs in order to produce the first unit of goods, may not be divisible below the economies of scale they need to achieve in order to produce the goods, which would make those methods unavailable to smaller producers. Some commodities may be indivisible if their minimum size or quantity


Information overload (also known as infobesity, infoxication, information anxiety, and information explosion) is the difficulty in understanding an issue and effectively making decisions when one has too much information about that issue. Infoglut refers specifically to masses of continuously increasing information, which are so poorly catalogued or organised (or not organised at all) that it


Data that is: Timely and accurate, specific and organised for a purpose, presented within a context that gives it meaning and relevance, and can lead to an increase in understanding and decrease in uncertainty. Information is valuable because it can affect behaviour, a decision, or an outcome. For example, if a manager is told his/her


An individual’s action that begins a process, often done without direct managerial influence. For example, an employee might take the initiative to come up with a new product or service that the company could offer.


The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Insider Information

Information gained by someone inside, or close to, a listed company which could confer a financial advantage if used to buy or sell shares. It is illegal for a person who is in possession of inside information to buy or sell shares on the basis of that information.


A state where an individual or organisation can no longer meet financial obligations with lender(s) when their debts come due.

Institutional Investor

An organisation whose business includes regular investment in shares of companies, examples being an insurance company, a pension fund, a charity, an investment trust, a unit trust, a merchant bank.


Without shape or form, cannot be touched.


A term used to describe activities that are conducted between two or more business units and/or affiliates of the same parent company.

Interest (On Loans)

The percentage return on capital required by the lender (usually expressed as a percentage per annum).

Interim Reports

Financial statements issued in the period between annual reports, usually half-yearly or quarterly.


A notation made between the lines, especially in a handwritten document.

Internal Reporting

Reporting financial information to those users inside a business, at various levels of management, at a level of detail appropriate to the recipient.


Stocks of goods held for manufacture or for resale.

Inverse Relationship

An Inverse relationship refers to a type of correlation that exists between two different numbers. In the instance of an inverse relationship when one number has a value that rises, then the other will correspondingly fall in the value of the first number.

Investing Activities

The acquisition and disposal of long-term assets and other investments not included in cash equivalents.


Persons or organisations which have provided money to a business in exchange for a share of ownership.


A non-negotiable commercial instrument issued by a seller to a buyer. It identifies both the trading parties and lists, describes, and quantifies the items sold, shows the date of shipment and mode of transport, prices and discounts (if any), and delivery and payment terms. In certain cases (especially when it is signed by the seller


A form of contractual agreement that cannot be altered, withdrawn or terminated. The irrevocable nature of the commitment allows each party to advance under certain assumptions. The opposite of revocable.

Accounting Terms Beginning With "J"

Job Specialisation

The process of focusing one’s occupational concentration on a specific area of expertise. An increase in job specialisation among employees can make them less flexible since it tends to reduce their ability to perform other types of work within the business that fall outside their particular speciality.

Joint And Several Liability (In A Partnership)

The partnership liabilities are shared jointly but each person is responsible for the whole of the partnership.


Journalising is the act of recording the debit and credit aspects of a business transaction in a journal, alongside an explanation of the transaction (known as Narration).

Accounting Terms Beginning With "K"

Key Performance Indicators

Quantified measures of factors that help to measure the performance of the business effectively.


The process in which individually separate but related items are grouped, packaged and supplied together as one unit. For example, in ordering a PC online, a customer may select memory, drives, peripherals, and software from several alternatives. The supplier then creates a customised kit that is assembled and shipped as one unit.

Accounting Terms Beginning With "L"

Law of One Price

The law of one price is an economic concept that states that the price of an identical asset or commodity will have the same price globally, regardless of location, when certain factors are considered.


The individual who appears on a lease and is responsible for the terms present in that agreement. There may be more than one leasee on a lease. The leasee must pay any fees that are agreed upon. If the leasor brings about a complaint against the leasee, the leasee would be considered the defendant.


Acquiring the use of an asset through a rental agreement.


One that transfers property (such as a house or a car) by a contract.


Books that contain all the details of financial accounts. There are three types of ledgers: the general ledger, the accounts receivable ledger, and the accounts payable ledger.

Legal Form

Representing a transaction to reflect it’s legal status, which might not be the same as it’s economic form.

Legal Realism

A view of nature of law that legal rules are based on judicial decisions given in the interest of larger society and public policy, and not on any dogma or supernatural authority. It defines ‘legal rights’ and ‘legal duties’ as whatever the courts say they are. If carried too far, however, this view results in


Alternative term for gearing, commonly used in the USA.


Obligations of an entity to transfer economic benefits as a result of past transactions or events.

Limited Liability

A phrase used to indicate that those having liability in respect of some amount due may be able to invoke some agreed limit on that liability.

Limited Liability Company

Company where the liability of the owners is limited to the amount of capital they have agreed to contribute.


Linehaul refers to the movement of cargo between two major cities or ports, especially those more than about 1,500 kilometres or 1,000 miles apart.


The extent to which a business has access to cash or items which can readily be exchanged for cash.

Listed Company

A company whose shares are listed by the Stock Exchange as being available for buying and selling under the rules and safeguards of the Exchange.

Listing Requirements

Rules imposed by the Stock Exchange on companies whose shares are listed for buying and selling.

Listing Rules

Issued by the UK Listing Authority of the Financial Services Authority to regulate companies listed on the UK Stock Exchange. Includes rules on accounting information in annual reports.

Loan Covenants

A Loan Covenant is an agreement made by the company with a lender of long-term finance, protecting the loan by imposing conditions on the company, usually to restrict further borrowing.

Loan Notes

A method of borrowing from commercial institutions such as banks.

Loan Stock

Loan finance traded on a stock exchange.

Long-Term Liabilities

Money lent to a business for a fixed period, giving that business a commitment to pay interest for the period specified and to repay the loan at the end of the period Also called non-current liabilities information in the financial statements should show the commercial substance of the situation.

Lurking Variable

Accounting Terms Beginning With "M"


Manner or philosophy based on (or one who adopts) the sceptical positions of Niccolò Machiavelli (1469-1527) whose name (in popular perception) is synonymous with deceit and deception in management and statesmanship. Born in Florence (Italy), Machiavelli was its second chancellor and (in 1513) penned the book ‘The Prince’ that considers ways in which the rulers


Collective term for those persons responsible for the day-to-day running of a business.

Management Accounting

Reporting accounting information within a business, for management use only.


A Mandator is a person, group, or organisation who issues a mandate to a mandatary.


Profit, seen as the ‘margin’ between revenue and expense.

Marginal Rate Of Substitution

The rate at which a consumer can give up some amount of one good in exchange for another good while maintaining the same level of utility.

Marginal Value

The value gained from either consuming or producing one additional unit of a product or service.


The process whereby something or someone is pushed to the edge of a group and accorded lesser importance. This is predominantly a social phenomenon by which a minority or sub-group is excluded, and their needs or desires ignored.

Market Return

The return on the overall theoretical market portfolio which includes all assets and having the portfolio weighted for value.

Market Value (Of A Share)

The price for which a share could be transferred between a willing buyer and a willing seller.

Marking To Market

Valuing a marketable asset at it’s current market price.


When a business increases the price of an item before it is sold. For example: if a Fridge was bought for £600 and is sold for £800, the markup is £200.


Refers to a stochastic process in which the expected value of an observation (which is conditional on all previous observations) at any stage is equal to the last of the previous observations. Named after the harness that keeps a horse’s head in a fixed position with its rows of teeth more or less parallel to


Expenses are matched against revenues in the period they are incurred (see also accruals basis).


Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.


The date on which a liability is due for repayment.

Maturity Profile Of Debt

The timing of loan repayments by a company in the future.

Memorandum (For A Company)

Document setting out main objects of the company and it’s powers to act.


Two organisations agree to work together in a situation where neither can be regarded as having acquired the other.


A system for collecting and organising information or ideas in a group collaboration environment. A metaplan strategy typically involves collecting ideas or information on cards, grouping the cards according to shared characteristics, and using a voting system to rank individual ideas or groups of ideas.


The engineering of microscopic devices

Minority Interest

The ownership interest in a company held by persons other than the parent company and it’s subsidiary undertakings. Also called a non-controlling interest.


MIRR – modified investment rate of return is a financial tool that is used to determine the attractiveness of an investment.  MIRR is used in capital budgeting as a tool to rank investments of equal size.


While MJSD (March, June, September and December) represents the most important reporting months, other combinations are equally as valid. JAJO (January, April, July and October) and FMAN (February, May, August and November) are also commonly used but the vast majority of domestic companies use the MJSD reporting cycle.


Modernity, a topic in the humanities and social sciences, is both a historical period, as well as the ensemble of particular socio-cultural norms, attitudes and practices that arose in the wake of the Renaissance—in the “Age of Reason” of 17th-century thought and the 18th-century “Enlightenment”. This term also refers to the characteristics of modern (post


A nickname for reorganisation in a monopolistic fashion derived from the great financier JP (John Piermont) Morgan, who was able to convince European backers to invest in industries in the U.S. which he was able to acquire and make them into monopolies. He helped monopolise the steel, railroad, banking and electrical industries.


A legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan.


Multidisciplinary knowledge is associated with more than one existing academic discipline or profession. A multidisciplinary community or project is made up of people from different academic disciplines and professions. These people are engaged in working together as equal stakeholders in addressing a common challenge. A multidisciplinary person is one with degrees from two or more


Multisourcing is a form of outsourcing via multiple coordinated vendors.

Accounting Terms Beginning With "N"


The state of being a citizen of a particular country.


Failure to exhibit care that one ought to exhibit.


Nepotism is the practise of appointing relatives and friends in one’s organisation to positions for which outsiders might be better qualified. Despite its negative connotations, supporters argue that nepotism (if applied sensibly) may act as an important and positive practice in the startup and formative years of a firm as complete trust and a willingness


After making deductions.

Net Assets

Assets minus liabilities (equals ownership interest).

Net Book Value

Cost of non-current (fixed) asset minus accumulated depreciation.

Net Profit

Sales minus cost of sales minus all administrative and selling costs.

Net Realisable Value

The proceeds of selling an item, less the costs of selling.


Netting refers to the settlement of mutual obligations between two parties (called bilateral netting) or with a third party acting as a clearinghouse (called multilateral netting) where the net difference (not the gross amounts) is carried forward. Netting is a common practice in trading of foreign exchange, futures, and options.


Qualitative characteristic of freedom from bias.

Nominal Value (Of A Share)

The amount stated on the face of a share certificate as the named value of the share when issued.

Non Zero Sum Game

In game theory, a non zero-sum game is a situation where one decision maker’s gain (or loss) does not necessarily result in the other decision-makers’ loss (or gain). In other words, where the winnings and losses of all players do not add up to zero and everyone can gain: a win-win game.

Non-Controlling Interest

See minority interest.

Non-Current Assets

Any asset that does not meet the definition of a current asset. Also described as fixed assets.

Non-Current Liabilities

Any liability that does not meet the definition of a current liability. Also described as long-term liabilities.

Non-Depository Institutions

In insurance, A policy contract that specifies that the insured may continue coverage by paying the premiums for a specific time frame. During the same time frame, the insurer is prohibited from making changes. The premiums on this type of policy cannot be changed during the term.


Failure to conform.

Notes To The Accounts

Information in financial statements that gives more detail about items in the financial statements.

Accounting Terms Beginning With "O"


A specific result that a person or system aims to achieve within a time frame and with available resources.


becoming outdated

Off-Balance-Sheet Finance

An arrangement to keep matching assets and liabilities away from the entity’s balance sheet.

Offer For Sale

A company makes a general offer of it’s shares to the public.


A person or entity who makes a specific proposal to another (the offeree) to enter into a contract.


A clause, statement, or fact that is left out or not mentioned – or included and neglected, or failed to be performed.

Opening the Books

When a business closes their books at the end of the year and a new set is opened.

Operating Activities

The principal revenue-producing activities of the entity and other activities that are not investing or financing activities.

Operating And Financial Review

Section of the annual report of many companies which explains the main features of the financial statements.

Operating Margin

Operating profit as a percentage of sales.

Operating Risk

Exists where there are factors, such as a high level of fixed operating costs, which would cause profits to fluctuate through changes in operating conditions.

Operational Gearing

The ratio of fixed operating costs to variable operating costs.


Buying the rights to purchase an asset for a certain period of time. For example, a business may option an asset for 6 months for 10% of the sale cost. During this time they do not own the asset; however, the company that does own it is not allowed to sell it during this period.

Ordinary Shares

Shares in a company which entitle the holder to a share of the dividend declared and a share in net assets on closing down the business.

Organisational Infrastructure

An organisational infrastructure refers to the typically hierarchical arrangement of lines of authority, communications, rights and duties of an organisation.


OTE is on target or on track earnings. This is a term that will often be found in an advertisement for a job, especially when the advertisement is recruiting salespeople. Normally the pay structure will have two parts to it, a fixed part of the income and then a fixed sum or percentage of the


The year-end position in actual cash terms.


Insurance (from two or more policies) that exceeds the value of the item being covered.


The legal process by which the interest in an asset is converted into a corresponding interest in another asset. For example, interest in a real property converted into an interest in the amount realised from its sale.

Overriding Commission

In insurance, an overriding commission is a commission paid by an insurer to an agent or managing general agent for premium volume produced by other agents in a given geographic territory. In reinsurance, it is a commission paid to an intermediary in return for placing a retrocession of reinsurance.

Ownership Interest

The residual amount found by deducting all of the entity’s liabilities from all of the entity’s assets. (Also called equity interest.)

Accounting Terms Beginning With "P"


A publication with signatures glued into a flexible cover, typically made of paper or cardboard. Also known as softcover, softbound or softback.


In science and philosophy, a paradigm is a distinct set of concepts or thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field.

Parent Company

Company which controls one or more subsidiaries in a group.


Two or more persons in business together with the aim of making a profit.

Partnership Deed

A document setting out the agreement of the partners on how the partnership is to be conducted (including the arrangements for sharing profits and losses).

Partnership Law

Legislation which governs the conduct of a partnership and which should be used where no partnership deed has been written.

Payment On Account

Payment on Account is a tax payment made twice a year by self-employed people in order to spread the cost of the year’s tax. It is calculated by looking at your previous year’s tax bill, and is due in two instalments. The Payment on Account can be thought of as a way of paying off some of your tax bill in advance.


An individual, agency, association, branch, corporation, estate, group, partnership, or other entity or organisation having legal rights and responsibilities separate from those of other entities and/or of its owners or members. See also, juridical person.


A (slang) term for an administrator who works in the area of personnel management.


Spreading widely throughout an area or a group of people. (especially concerning an unwelcome influence or physical effect)

Petty Cash

A small amount of cash withdrawn from the bank used to buy miscellaneous items, e.g. stationary, stamps, milk, etc.


Pinay is a colloquial term for Filipina, the feminine form of Pinoy.


Higher worth achieved by combining several smaller pieces of land into a larger tract.

Point Estimate
Portfolio (Of Investment)

A collection of investments.

Portfolio Of Shares

A collection of shares held by an investor.


Preparatory advice that is given about a credit letter, usually given to the issuing bank from the advising bank, when time is of the essence. It is also referred to as the preliminary advice.


The issuance of an invoice before the product or service has been provided.

Preference Shares

Shares in a company which give the holder a preference (although not an automatic right) to receive a dividend before any ordinary share dividend is declared.

Preliminary Announcement

The first announcement by a listed company of it’s profit for the most recent accounting period. Precedes the publication of the full annual report. The announcement is made to the entire stock market so that all investors receive information at the same time.


An amount paid in addition, or extra.


An amount paid for in advance for an benefit to the business, such as insurance premiums or rent in advance. Initially recognised as an asset, then transferred to expense in the period when the benefit is enjoyed. (Also called a prepaid expense.)

Present Fairly

A condition of the IASB system, equivalent to true and fair view in the UK ASB system.

Price-Sensitive Information

Information which, if known to the market, would affect the price of a share.

Price–Earnings Ratio

Market price of a share divided by earnings per share.

Primary Financial Statements

The balance sheet, profit and loss account, statement of total recognised gains and losses and cash flow statement.

Primary Stakeholders

Individuals or groups directly benefiting from (or affected by) particular business activity, such as the distribution of a product or changes within a service agreement. Primary stakeholders may include customers, employees, stockholders, lenders, suppliers, or anyone else with a functional or financial stake in the product or situation. Also called market stakeholder.

Principal (Sum)

The agreed amount of a loan, on which interest will be charged during the period of the loan.

Private Limited Company (Ltd)

A company which has limited liability but is not permitted to offer it’s shares to the public.


the character, state, or fact of being producible

Production Overhead Costs

Costs of production that are spread across all output, rather than being identified with specific goods or services.


Calculated as revenue minus expenses.

Profit And Loss Account

Financial statement presenting revenues, expenses, and profit. Also called income statement.


Disproportionately large or grossly unfair profit, generated often through manipulation of prices, abuse of dominant position, or by exploiting a bad or unusual situation such as temporary scarcity. There is usually no governmental control over profiteering unless it involves illegal means.


Hypothetical assumptions used to estimate future financial statements.


A term used to describe the lower working-class, which is mostly composed of wage workers. Each civilization categorises the group differently. Some consider only destitute individuals as proletariat and some consider any wage worker as the proletariat. The term is derived from the Marxist ideology, which is based on Karl Marx’ Communist Manifesto.

Prospective Investor

An investor who is considering whether to invest in a company.


Financial statements and supporting detailed descriptions published when a company is offering shares for sale to the public.


A liability of uncertain timing or amount.

Provision For Doubtful Debts

An estimate of the risk of not collecting full payment from credit customers, reported as a deduction from trade receivables (debtors) in the balance sheet.


A degree of caution in the exercise of the judgements needed in making the estimates required under conditions of uncertainty, such that gains and assets are not overstated and losses and liabilities are not understated.

Public Limited Company (PLC)

A company which has limited liability and offers its shares to the public.

Purchase Method

Method of producing consolidated financial statements.


Total of goods and services bought in a period.


Internal logistics process from receipt of a load to when it is stocked in its final destination within a warehouse. Activities may include inspection, breaking down the load into more mobile components, determining the appropriate destination, preparing the destination location, transporting the items, and physically stocking them.

Accounting Terms Beginning With "Q"


This refers to the four components of a responsible corporate management approach (Quality, health, safety, environment) based on the belief that all accidents are caused by human error and are, therefore, preventable with better training and administration. A QHSE (or Quality, Health, Safety, and Environment) management system aims at building health and safety arrangements that

Qualified Audit Opinion

An audit opinion to the effect that: the accounts do not show a true and fair view; or the accounts show a true and fair view except for particular matters.

Quality Of Earnings

Opinion of investors on reliability of earnings (profit) as a basis for their forecasts.


Abate, annul, make void, terminate, or throw out an action, appeal, indictment, subpoena, or summons.


A smart, sarcastic turn or jest; a taunt; a severe retort or comeback; a gibe.


Metric unit equal to 1/10th of a ton (100 kilograms) or approximately 220.46 pounds.


The fixed minimum number of eligible members or stockholders who must be present (physically or by proxy) at a meeting before any official business may be transacted or a decision taken therein becomes legally binding. Usually, the articles of association or bylaws of a firm specify this number, otherwise, the number prescribed in corporate legislation


In Economics, a quota is a government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period. Countries use quotas in international trade to help regulate the volume of trade between them and other countries.

Quoted Company

Defined in section 262 of the Companies Act 1985 as a company that has been included in the official list in accordance with the provisions of Part VI of the Financial Services and Markets Act 2000, or is officially listed in an EEA state, or is admitted to dealing on either the New York Stock Exchange or the exchange known as Nasdaq.

Accounting Terms Beginning With "R"


A belief that some races are fundamentally superior to others, and that racial differentiation is important in determining human behaviour.

Rank-And-File Employees

Acceptance or confirmation of an act or agreement that was signed (executed) by the confirming party itself. A treaty, for example, is not enforceable or valid until the ratification process is complete.

Realisation Principle

When revenue can only be recognised when the goods or services that generated that revenue have been delivered.

Realised Profit

A profit arising from revenue which has been earned by the entity and for which there is a reasonable prospect of cash being collected in the near future.


A second or subsequent booking.


Period of general economic decline defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Typically marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression. Recessions generally occur when there

Recessionary Gap

An item is recognised when it is included by means of words and amount within the main financial statements of an entity.


An airlines requirement under which a passenger must reconfirm at least 72 hours before the flight that he or she will be on the flight. Otherwise, the airline has the right to assign the seat to someone else.


A recovery of what had been lost.


Loan agreements: Legal right of a lender to seek repayment of the loan from the borrower’s (and/or the guarantor’s) unpledged personal property, in addition to the property pledged to the lender as collateral. Negotiable instrument: Legal right of the holder to demand and require payment from the drawer, maker, or endorser if the instrument (such

Recoverable Amount

The value of an asset treated as the greater of it’s net realisable value and it’s value in use.

Redemption Premium

The amount over par value that a bond issuer must pay an investor if a security is redeemed early.


Regionalisation is the process of dividing an area into smaller segments (known as regions).

Registered Book-keeper

A member of the International Association of Book-keepers (IAB).

Registered Trader

A taxable person who has complied with the registration for value added tax regulations.

Registrar of Companies

An official authorised by the government to maintain a record of all annual reports and other documents issued by a company.


A technique for determining the statistical relationship between two or more variables where a change in a dependent variable is associated with, and depends on, a change in one or more independent variables.


Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself from risk in the event of a major claim.

Reinvestment Rate

The reinvestment rate is the amount of interest that can be earned when money is taken out of one fixed-income investment and put into another.


Qualitative characteristic of influencing the economic decisions of users.


The practice of increasing the level of debt in the capital structure of a business.


Qualitative characteristic of being free from material error and bias, representing faithfully.


The gradual loss of water from a river, lake etc to leave permanent dry land


money paid for work or a service.


A nationalisation of something which had previously been nationalised and then privatised.


If you rent something, you regularly pay its owner a sum of money in order to be able to have it and use it yourself.

Replacement Cost

A measure of current value which estimates the cost of replacing an asset or liability at the date of the balance sheet. Justified by reference to value to the business.

Replacement Cycle

A replacement cycle is the pattern over which capital equipment is replaced, in particular the time from purchase to replacement.

Reporting Currency

The currency used by an organisation in it’s financial statements.


Written order or a formal demand by the user(s) of a good or service (which is not made available without a specific request) to the organisation’s purchase (or stores) department. It generally includes the brand and model name or number, description, quantity, and the required delivery date. Also sometimes referred to as a purchase requisition.


The claim which owners have on the assets of a company because the company has created new wealth for them over the period since it began.

Residual Value

The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated cost of disposal, if the asset were already of the age and in the condition expected at the end of it’s useful life.


A retainage is a portion of a contract’s final payment that’s withheld by a principal (client or owner) until the project is complete in all respects; functioning satisfactorily according to the contract terms, and all mechanic’s liens have either been released or have expired.

Retained Earnings

Accumulated past profits, not distributed in dividends, available to finance investment in assets.

Retained Profit

Profit of the period remaining after dividend has been deducted.


The condition of retaining (keeping) something. “You may be able to memorise the facts in the short-term, but how well is your retention of those facts over the long-term?”

Retrenchment Strategy

Applicable or effective from a prior date or period, such as retroactive pay or retroactive pricing.


A retrocessionaire is a reinsurance company that insures other reinsurers.


The yield or reward from an investment.

Return (In Relation To Investment)

The reward earned for investing money in a business. Return may appear in the form of regular cash payments (dividends) to the investor, or in a growth in the value of the amount invested.

Return On Capital Employed

Operating profit before deducting interest and taxation, divided by share capital plus reserves plus long-term loans.

Return On Shareholders’ Equity

Profit for shareholders divided by share capital plus reserves.

Return On Total Assets

Operating profit before deducting interest and taxation, divided by total assets.

Returns Outwards

Returns outwards are goods returned by the customer to the supplier. For the supplier, this results in the following accounting transaction: A debit (reduction) in revenue in the amount credited back to the customer.

Revaluation Reserve

The claim which owners have on the assets of the business because the balance sheet records a market value for an asset that is greater than its historical cost.


Created by a transaction or event arising during the ordinary activities of the business which causes an increase in the ownership interest.

Rights Issue

A company gives its existing shareholders the right to buy more shares in proportion to those already held.

Risk (In Relation To Investment)

Factors that may cause the profit or cash flows of the business to fluctuate.


Accounting Terms Beginning With "S"


A non-metric unit of sound absorption.


fit or able to be sold.

Sales Account

An account used to record cash and credit sales transactions resulting from the sales of goods and/or services.

Sales Function

The section of an organisation responsible for selling it’s products and/or services.

Sales Invoice

Document sent to customers recording a sale on credit and requesting payment.

Sales Mix

The relative proportions of individual products that make up the total units sold.

Sales Volume

The number of units sold of each product.

Sampling Frame
Secondary Auditor

The auditor of a subsidiary company who is not also the auditor of the parent company.

Secured Creditor

A secured creditor is a creditor who holds either a fixed or a floating charge over the assets of a debtor.

Secured Loan

Loan where the lender has taken a special claim on particular assets or revenues of the company.

Segmental Reporting

Reporting revenue, profit, cash flow assets , liabilities for each geographical and business segment within a business, identifying segments by the way the organisation is managed.

Serial Bonds

Bonds that mature in instalments, rather than on one maturity date.

Settlement Day

A settlement day is the day on which trades are cleared by the delivery of the securities or foreign exchange.

Shadow Price

The opportunity costs that arise in the solution to a linear programming model.

Share Capital

Name given to the total amount of cash which the shareholders have contributed to the company.

Share Certificate

A document providing evidence of share ownership.

Share Premium

The claim which owners have on the assets of a company because shares have been purchased from the company at a price greater than the nominal value.


Owners of a limited liability company.

Shareholders’ Funds

Name given to total of share capital and reserves in a company balance sheet.


The amount of share capital held by any shareholder is measured in terms of a number of shares in the total capital of the company.


Equipment quantity greater than what is needed to complete a system or to meet a requirement, such as the number of engines on a ship or radios on an aircraft.

Short-Term Finance

Money lent to a business for a short period of time, usually repayable on demand and also repayable at the choice of the business if surplus to requirements.


In mathematics, the Greek symbol sigma represents a summation operator.


The fundamental characteristic of services that they are produced and consumed at the same time at the point of sale.


A recurring report which (unlike a periodic report prepared at regular and fixed intervals) records and describes a particular occurrence or event.

Social Audit

An audit of the impact of an organisation on society.


An economic system in which goods and services are provided through a central system of cooperative and/or government ownership rather than through competition and a free market system.

Soft Currency

A currency that is not freely convertible and for which only a thin market exists.

Sole Practitioner

Within the Law sector, a sole practitioner (or solo practitioner) is a lawyer who practices independently; typically within a law firm that may include non-lawyer support personnel but does not include any other lawyers.

Sole Trader

An individual owning and operating a business alone.

Source Document

A source document is a document in which data collected for a clinical trial is first recorded. This data is usually later entered in the case report form.

Specific Purpose Financial Statements

Documents containing accounting information which is prepared for a particular purpose and is not normally available to a wider audience.

Square Position

In financial trading, an open position that has been covered or hedged.


A supplier request for engineering approval (SREA) is a written request seeking manufacturing changes to a product as for intended customisation purposes.


Stagflation is a undesirable mix of rising prices (based on high demand, production capacity constraints, or both) and falling growth. In economics, stagflation, or recession-inflation, is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended


A general term devised to indicate all those who might have a legitimate interest in receiving financial information about a business because they have a ‘stake’ in it.

Standard Operating Cost

The Standard Operating Cost is the total of all the standard cost allowances for the actual level of activity achieved by an organisation.

Standard Operating Profit

The budgeted revenue from an operation less the standard operating cost.

Standing Data

Information held on file in a computer for long-term use because it does not often change.

Statement Of Changes In Equity

A financial statement reporting all items causing changes to the ownership interest during the financial period, under the IASB system.

Statement Of Changes In Financial Position

This is a US term for a cash-flow statement.

Statement Of Principles

A document issued by the Accounting Standards Board in the United Kingdom setting out key principles to be applied in the process of setting accounting standards.

Statement Of Recognised Income And Expense

A financial statement reporting realised and unrealised income and expense as part of a statement of changes in equity under the IASB system.

Statement Of Total Recognised Gains And Losses

A financial statement reporting changes in equity under the UK ASB system.

Statutory Law

Statutory law or statute law is written law passed by a body of legislature.

Statutory Maternity Pay (SMP)
Stepped Bond

Loan finance that starts with a relatively low rate of interest which then increases in steps.


A Sterilant is a type of antimicrobial that kills (or irreversibly inactivates) all bacteria, fungi, and viruses (called microbials, micro biologicals, microorganisms), including their spores (hardened form) which are among the most difficult-to-kill forms of life. Some sterilants (such as pure chlorine or chlorine dioxide) are also powerful oxidising agents. Non-chemical sterilants include very high


Taking care of resources owned by another person and using those resources to the benefit of that person.


A word with two different meanings. It may be used to describe an inventory of goods held for resale or for use in business. It may also be used to describe shares in the ownership of a company. The meaning will usually be obvious from the way in which the word is used.

Stock Holding Period

Average number of days for which inventory (stock) is held before use or sale.


In the USA, individuals, businesses, and groups owning stocks in a corporation.


A Subassembly is an assembly that is assembled with others to form a larger assembly


An individual who is responsible for dividing usually large parcels of land into smaller plots with the intent to sell.


Most frequently: a sublease pertains to the renting of property by a tenant to a third party for a portion of the tenant’s existing lease contract.

Subsidiary Company

Company in a group which is controlled by another (the parent company). Sometimes called subsidiary undertaking.

Substance (Economic)

Information in the financial statements should show the economic or commercial substance of the situation.


A Subsubsidiary is a subsidiary undertaking of a company that is in itself a subsidiary.


Totals of similar items grouped together within a financial statement.

Sunk Costs

Money that has already been spent and cannot be recovered.

Suppliers’ Payment Period

Average number of days credit taken from suppliers.


In business, survivability refers to the capability of a system or organisation to withstand a disaster or hostile environment, without significant impairment to its normal operations. Related to susceptibility.

Suspense Account

A temporary account with which funds are deposited before allocation to the correct place. For example, if there is too much money in one account, it will be transferred to a suspense account until its correct location is discovered.


An option to enter into a swap contract.

SWOT Analysis

A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company.

Accounting Terms Beginning With "T"

Tangible Fixed Assets

A fixed asset (also called a non-current asset) which has a physical existence.

Target Company

An acquiring company identifies takeover targets based on a variety of factors, including share price and growth potential; it may buy up to 5% of the takeover target without publicly disclosing its intentions. A takeover target is also called a target company.


A tariff is a tax on imports or exports between sovereign states. It is a form of regulation of foreign trade and a policy that taxes foreign products to encourage or safeguard domestic industry.

Task Environment

Any business or consumer with direct involvement with an organisation may be part of the task environment. Examples of task environment sectors include competition, customers, suppliers and the labour supply.


Charge levied by a governmental unit on income, consumption, wealth, or other basis.

Tax Accountant

A person or organisation who assists a taxpayer in preparing a tax return.

Tax Allocation
Tax Break

A Tax break is a tax concession or advantage permitted by the government.

Tax Code

The number found by adding up an individual’s personal allowances which is used to calculate that individual’s tax liability.

Tax Free

Denotes to any payment, allowance, benefit, etc. , that is not subject to taxation.

Tax Rebate

A tax rebate is a refund on taxes paid to an individual or household when the actual tax liability is less than the total amount of taxes paid during the tax year. A tax rebate also results from any refundable tax credit that reduces a taxpayer’s bill below zero. Taxpayers tend to look at tax

Tax Reference Number

A Unique Taxpayer Reference number is typically found on self assessment forms, like a statement or tax return. A tax reference number and tax code are usually found on a PAYE employer form, like a P45, P60, a payslip or PAYE Coding Notice from HMRC.

Tax System
Taxable Supply

A taxable supply is any supply made in the UK which is not exempt from VAT. Taxable supplies include those which are zero-rated for VAT .


Process of instituting a charge against a legal entity’s person, property or activity for the support of government. (For example, income taxes, sales taxes, duties and levies.)


To be announced (TBA), to be confirmed or continued (TBC), to be determined or decided or declared (TBD), and other variations, are placeholder terms used very broadly in event planning to indicate that although something is scheduled or expected to happen, a particular aspect of that remains to be arranged or confirmed.

Technological Risk
Telephone Banking

A method of banking in which the customer conducts transactions by telephone.


In a certain order, with regards to time. The term describes how things are related to each other in terms of time. “I thought the two events that I wanted to attend were at the same time, but I later found out they were temporally arranged, which meant that I could attend one and then

Tender Bond

A Tender Bond is required by a Contractor during the submission of tenders for contract jobs to the Principal.

Tender Panel

A group of banks forming a panel to tender competitively to lend money to a company.


A requirement for which a feasible and objective test can be designed.


A set of assumptions, propositions, or accepted facts that attempts to provide a plausible or rational explanation of cause-and-effect (causal) relationships among a group of the observed phenomenon. The word “Theory” originates from the Greek word thorós, which means “a spectator”. The word’s origin stresses the fact that all theories are mental models of the


Qualitative characteristic that potentially conflicts with relevance.

Times Interest Earned Ratio

An indicator of a company’s ability to meet the interest payments on it’s debt.


Within the Six Sigma methodology, a tollgate is a measurable objective that is used to enable a prospective customer to pass from one stage to another. By establishing the desired level of movement between each of the stages of DMAIC (define, measure, analyze, improve and control), team members can define barriers or gateways that allow

Total Assets Usage

Sales divided by total assets.

Total Cost of Ownership

The real, total cost of an asset. For example, an asset may cost £2,000 up-front, but have an annual renewal fee of £200; therefore, assuming it’ll have a lifespan of five years, the TCO would be £3,000.

Total Standard Cost

In standard costing, the total standard production cost plus the standard cost allowance for the non-production overhead.

Total Standard Production Cost
Total Standard Profit

A system of government that is centralised and dictatorial and requires complete subservience to the state.


A tract is a defined or specified piece of land.

Trade Creditors

Persons who supply goods or services to a business in the normal course of trade and allow a period of credit before payment must be made.

Trade Debtors

Persons who buy goods or services from a business in the normal course of trade and are allowed a period of credit before payment is due.

Trade Discount

A reduction from the sales list price that a business might offer to some of its customers. The amount of the trade discount will be shown on the face of the invoice as a deduction from the list price. A Settlement Discount is different.

Trade Payables

Amounts due to suppliers (trade creditors), also called accounts payable.

Trade Receivables

Amounts due from customers (trade debtors), also called accounts receivable.

Trading Account
Trading Profit

Trading Profit is the profit that an investor derives from buying and selling short-term securities, or those held by the investor for less than one year.


In general, carrying on a disreputable or illegal commercial activity, such as the sale of banned substances.

Transaction Date
Transaction File

A transaction file (movement file) is a computer file used to record an external or internal transaction.

Translation Exposure

Translation exposure (also known as translation risk or accounting Exposure) is the risk that a company’s equities, assets, liabilities or income will change in value as a result of exchange rate changes.

Transposition Error

Where the characters within a number are entered in the wrong sequence.

Treasury Stock

A US term for shares that have been repurchased by the issuing company; thereby reducing the number of it’s shares on the open market.

Trend Analysis

The analysis of the performance of a company or industry over a period, by the use of accounting ratios.


A monetary pool in which tips / gratuities are collected and later shared out between all staff, e.g. in a restaurant.

True And Fair View

Requirement of UK company law for UK companies not using IASB system.


Ancient legal practice where one person (the grantor) transfers the legal title to an asset, called the principle or corpus, to another person (the trustee), with specific instructions about how the corpus is to be managed and disposed.


The sales of a business or other form of revenue from operations of the business.

Two-Tier Board

A method of running a large organisation in which, in addition to a board of management, there is also a supervisory board.


Study of the design of typefaces, and the way in which the type is laid out on a page to best achieve the desired visual effect and to best convey the meaning of the reading matter.

Accounting Terms Beginning With "U"

UK ASB system

The accounting standards and company law applicable to corporate reporting by UK companies that do not report under the IASB system.

Ultimate Holding Company

A company that is the holding company of a group in which some of the subsidiary companies are themselves immediate holding companies of their own groups.

Unamortised Cost

The historical cost of a fixed asset before any depreciation is deducted.

Unappropriated Profit

The part of an organisation’s profit that is neither allocated to a specific purpose nor paid out in dividends to shareholders.


Unbundling is the process of splitting a company or conglomerate into its constituent businesses, especially prior to selling them off.

Uncommitted Facility

An uncommitted facility is a borrowing agreement that allows the lender to determine how much it will lend to the borrower at a given time.

Unconsolidated Subsidiary

An unconsolidated subsidiary is a company that is owned by a parent company, but whose individual financial statements are not included in the consolidated or combined financial statements of the parent company to which it belongs.

Uncontrollable Costs

An uncontrollable cost is an expense over which a person has no direct control.

Undated Security
Undeposited Funds

Payments that have been received by cash, cheque, or credit card that have yet to be paid into the bank.


Under-capitalisation refers to any situation where a business cannot acquire the funds they need.


The asset, measure or obligation on which a derivative, such as an option or futures contract, is based.


Qualitative characteristic of financial statements, understandable by users.


A corporate body, partnership or an unincorporated association carrying on a trade or business with a view to making a profit.


A person who examines a risk, decides whether or not it can be insured, and, if it can, works out the appropriate premium to be charged, usually on the basis of frequency of past claims for similar risks.

Underwriting Group

A underwriting group is a group of financial institutions that receive a fee for underwriting a new securities issue.

Undischarged Bankrupt

A undischarged bankrupt is a Bankrupt person who is not granted an ‘order of discharge’ by a court.

Undistributable Reserves

Undistributable Reserves (also known non-distributable profit) are reserves that may not be distributed according to the Companies Act.

Undistributed Profit
Unearned Income

A person of employment age (generally 16 to 55 years) who does not have a paying job but is available for work and is actively seeking a job.

Unexpired Cost

An unexpired cost is any cost that has not yet been charged to expense because it still represents some residual value.

Unfranked Investment Income
Uniform Commercial Code

The uniform commercial code is a legal code that standardises US business law.

Uniform Costing

It is a particular technique which applies the usual accounting methods like standard costing, marginal costing, and budgetary control.

Unilateral Relief

A corrective measure which is taken by a country to minimise the effect of double taxation in a situation where similar relief is unavailable through a tax treaty. Relief is typically provided in the form of an adjustment on tax liability using a tax credit. In the UK, TIOPA10/S18 allows unilateral tax credit relief to

Unincorporated Association

An unincorporated association is an association of people that is not a corporation and which has no legal personality distinct from that of it’s members.


the act or process of organising workers to become members of a trade union (which is an organisation that represents people who work in a particular industry).

Unissued Share Capital
Unit Cost
Unit Of Account
Unit Price
Unit Standard Operating Profit
Unit Standard Production Cost
Unit Standard Selling Price
United Nations Board Of Auditors

The United Nations Board of Auditors (BoA) was established by the General Assembly in 1946 to carry out the external audit of the accounts of the United Nations organisation and its funds and programmes.


When a company uses funds available within the company to purchase investments instead of borrowing from another source.

Unlisted Company

Limited liability company whose shares are not listed on any stock exchange.

Unpaid Cheque
Unpresented Cheques

Cheques paid out which are passing through the bank clearing system, but have not yet been presented to the bank where the account is maintained.


Gains and losses representing changes in values of assets and liabilities that are not realised through sale or use.

Unrealised Profit/Loss
Unregistered Business

A business that is not VAT registered. It ignores VAT and treats it as part of the cost of purchases. It does not charge VAT on its outputs. It does not need to maintain any record of VAT paid.

Unsecured Credit

Credit extended only on the basis of the debtor’s promise to repay, without any collateral security.

Unsecured Creditor

An unsecured creditor is a creditor other than a preferential creditor that does not have the benefit of any security interests in the assets of the debtor.

Unsecured Creditors

Those who have no claim against particular assets when a company is wound up, but must take their turn for any share of what remains.

Unsecured Loan

Loan in respect of which the lender has taken no special claim against any assets.

Unsecured Loan Stock

A loan stock or debenture in which no specific assets have been set aside as a fund out of which the holders could be paid in priority to other creditors in the event of non-payment.


A Network marketing term for all independent distributors who are above a representative’s genealogy, including his or her sponsor.

Urgent Issues Task Force

The Urgent Issues Task Force (UITF) was established to investigate areas where conflicts or unsatisfactory interpretation of an accounting standard or Companies Act provision exists or may develop in the future.

Usage Rate

Usance refers to the time allowed for the payment of foreign bills of exchange, according to law or commercial practice.

Useful Economic Life

The period for which the present owner of an asset will derive economic benefits from its use. Under Statement of Standard Accounting Practice 12, Accounting for Depreciation, an asset should be depreciated over its useful economic life.


The state or condition of being useful; usefulness.

Accounting Terms Beginning With "V"

Valuation Risk

Valuation risk is the financial risk that an asset is overvalued and is worth less than expected when it matures or is sold.

Value Added Statement

A Value Added Statement is a financial statement that depicts wealth created by an organisation and how that wealth is distributed among various stakeholders.

Value Added Tax

The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services.

Value At Risk

Value At Risk (VAR) is a mechanism for measuring market risk and credit risk.

Value Chain

The value chain is the chain of activities by which a good or service is produced, distributed, and marketed.

Value Date
Value Driver

Any variable that significantly affects the value of an organisation.

Value For Money Audit

An audit of a governmental department, charity or other not-for-profit organisation to assess whether or not it’s functioning efficiently and giving value for the money it spends.

Value In Use

The value of an asset calculated by discounting the future cash flows obtainable from it’s continued use.

Value Investment

An investment strategy which is guided by a view of the real underlying value of a company and it’s long-term growth potential.

Value To The Business

An idea used in deciding on a measure of current value.


Malicious, mindless injury to or destruction of public or private property.

Vapour Lock

Vapour lock is the situation whereby the liquid in a pipeline (or tubeline) gets trapped in the line and cannot flow because of vapour formation.

Variable Cost

An item of expenditure that, in total, varies directly with the level of activity achieved.

Variable Cost Ratio

The variable cost ratio reveals the total amount of variable expenses incurred by a business, stated as a proportion of its net sales.

Variable Overhead Cost
Variable Overhead Efficiency Variance
Variable Overhead Expenditure Variance

The variable overhead expenditure variance is the difference between the actual and budgeted rates of spending on variable overhead.

Variable Overhead Total Variance
Variable Production Overhead

Variable production overheads are those manufacturing costs that vary in relation to changes in the output of production.

Variable-Rate Note

A bond, typically with a fixed maturity, of which the interest coupon is adjusted at regular intervals to reflect the prevailing market rate.

Variable-Rate Security

Examples of variable-rate securities are floating-rate notes, euro-bonds and 90-day certificates of deposits.


The difference between a planned, budgeted or standard cost and the actual cost incurred. An adverse variance arises when the actual cost is greater than the standard cost. A favourable variance arises when the actual cost is less than the standard cost.


The particular value of a variable.


A measure of the sensitivity (rate of change) of an option’s price to the change in the price of the underlying asset.


One who purchases something.

Vendor Placing

A type of placing used as a method of financing a takeover in which the purchasing company issues its own shares as payment to the company being bought, with the prearranged agreement that these shares are then placed with investors in exchange for cash.


A merchant who undertakes a trading venture (especially a venture that sends goods overseas)


The principle that the reliability of the financial information provided by a company should be open to confirmation.


An substantive auditing test that confirms on the existence, ownership and valuation of assets and liabilities.

Vertical Integration

Vertical disintegration is said to occur when a company withdraws from a stage in the value chain, usually because it decides it would be more cost effective to hire another company to carry out said activities.

Vested Benefit

A benefit to which an employee has full entitlement and one which he will retain in any circumstance.

Vested Interest

An interest in property that is certain to come about rather than one dependent upon some event that may not happen. (or) An involvement in the outcome of some business, scheme, plan, transaction, usually in anticipation of some personal gain.


A vote that prevents a proposed action from occurring or being completed. A veto usually comes from an authority figure or leader whose one vote has equal or more authority than that of the majority. In the US, the US President can veto a proposed law; however, because of the system of checks and balances,

View To Resale

Grounds on which a subsidiary undertaking may be excluded from the consolidated financial statements of a group.


Virement is the process of moving money from one financial account or part of a budget (a plan for how the money will be spent) to a different one. For example, within the Government where one department underspends and another department needs more funding, the funds can be procured through virement.


A mental process in which images of the desired future (goals, objectives, outcomes) are made intensely real and compelling to act as motivators for the present action.


To impair or invalidate in part or in full; make void or voidable.


A process of converting a material into a glass-like amorphous solid which is free of any crystalline structure, either by the quick removal or addition of heat or by mixing with an additive.


Capable of being voided or made void.

Voided Check
Voluntary Arrangement

The CVA is a form of composition, similar to the personal IVA (individual voluntary arrangement), where an insolvency procedure allows a company with debt problems or that is insolvent to reach a voluntary agreement with its business creditors regarding repayment of all, or part of its corporate debts over an agreed period of time.


A Vertical portal. A website that serves as a gateway to most or all players in a specific industry or market such as autos, chemicals, steel, etc.

Voting Shares

Voting shares are shares that give the stockholder the right to vote on matters of corporate policymaking. Owning voting shares also allows a vote on who should be on the company’s board of directors.


A Voucher is a receipt for money, or any document that supports an entry in a book of accounts.


A substantive test in an audit to check that the underlying records correctly show the nature of transactions entering into by the business being audited.

Accounting Terms Beginning With "W"


Payments made to employees for their services. Wages are classified as business expenses.

Waiting Time

A waiting period is the period of time between when an action is requested or mandated and when it occurs.

Wall Street

In trading, a wallflower describes a stock in which the investment community has lost interest, thus resulting in low trading volumes.

War Loan

A government stock issued during wartime; It has no redemption date and pays only 3.5% interest.


The storage of goods in a warehouse. (Or) The building up of a holding of shares in a company prior to making a takeover bid.


A security that offers the owner the right to subscribe to the ordinary shares of a company at a fixed date, usually for a fixed price. (or) A document that serves as confirmation that goods have been deposited in a public warehouse.

Wasting Asset

A wasting asset is a property or security that has a limited life and loses value over its life.

Wealth Management

In recent years this part of the financial sector has grown rapidly as a result of an increase in the number of wealthy individuals across the world.

Wealth Tax

A wealth tax is a levy on the total value of personal assets, including bank deposits, real estate, assets in insurance and pension plans, ownership of unincorporated businesses, financial securities, and personal trusts.

Wear And Tear

A diminution in the value to an organisation of a fixed asset due to the use and damage that it sustains through it’s working life.

Weighted Average

An arithmetic average that takes into account the importance of the items making up the average.


Denoting to a business that has very few tangible assets. (or) Denoting that part of the economy that is based on ideas and information rather than trade in physical goods.

Westminster Doctrine

The Westminster Doctrine refers to the principal that a person is entitled to make any lawful arrangement of his affairs that he sees fit in order to reduce liability to tax.


In business terminology, wharfage is a charge assessed by a shipping terminal or port when goods are moved through the location. It is one of the typical costs of transporting goods, within the distribution system used by a business to bring its goods to market.


A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organisation that is either private or public.

White Knight

The accounting definition of this term derives from the English definition for the term White Knight. Someone or something that rescues or saves another person or thing from a bad situation especially : a company that buys a second company in order to prevent it from being taken over by a third company.

Wholesale Market Broker’s Assocation

The trade association for UK trade brokers operating within the money market.


Person or firm that buys a large number of goods from various producers or vendors, warehouses them and resells to retailers.


A generic term given for a manufactured good.

Wildcat Strike

A strike initiated by a group of employees without being organised nor supported by their trade union.


A document giving directions as to the allocation and disposal of a person’s property after death.

Windfall Gains And Losses

Gains and losses arising from actual or prospective receipts that differ from those originally predicted.

Winding-up Petition

A winding up petition (WUP) is a legal action taken by a creditor or creditors against a company that owes them money (although others can also petition).

Window Dressing

Window dressing refers to any practice that attempts to make a situation look better than it actually is.

Withholding Tax

Tax deducted at the source from dividends or other income paid to non-residents of a country.


The amount of money that’s withheld from an employees salary and paid (by the employer) to the correct authority. Some examples include pension schemes and national insurance.

Without Prejudice

Without abandonment of a claim, privilege, or right, and without implying an admission of liability.

Without Recourse

A qualified endorsement on such a negotiable instrument, by which the endorser protects himself or herself from liability to subsequent holders.


Cost of partly completed goods or services, intended for completion and recorded as an asset.


A system making income support for the unemployed conditional on their performing some form of work for which they are suitable.

Working Capital

Finance provided to support the short-term assets of the business (stocks and debtors) to the extent that these are not financed by short-term creditors. It is calculated as current assets minus current liabilities.

Working Capital Cycle

Total of stock holding period plus customers collection period minus suppliers payment period.

Working-Capital Adjustment

An adjustment made to the working capital of a business.

World Bank

The World Bank is an international organisation dedicated to providing financing, advice, and research to developing nations to aid their economic advancement.

World Class

Goods, services, and processes that are ranked by customers and industry experts to be among the best in class. This designation denotes standard-setting excellence in terms of design, performance, quality, and customer satisfaction and value when compared with all similar items from anywhere in the world.

World Congress of Accountants

The World Congress of Accountants has been held under the auspices of the International Federation of Accountants (IFAC), the worldwide organisation for the accountancy profession, every five years since 1977 and every four years since 2002. Now, The World Congress of Accountants (WCOA) only occurs every four years. The World Congress of Accounts aims to inspire and

World Economic Forum

The World Economic Forum is the International Organisation for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society in order to shape global, regional and industry agendas.

World Trade Organisation

The World Trade Organisation is an international body that supervises and encourages international trade.

Writ Of Execution

A writ of execution (also known as an execution) is a court order granted to put in force a judgement of possession obtained by a plaintiff from a court.

Write Down

A partial value reduction of an asset. A write-down is a non cash expense that affects profits.

Write Off

In accounting, writing off is the expensing of a balance sheet asset that has no future benefits.

Written Down Value

The value of an asset for tax purposes after taking account of it’s reduction in value below the initial cost, as a result of it’s use in the trade.

Wrongful Dismissal

Termination of employment by the employer contrary to the employee’s contract of employment.

Wrongful Trading

Wrongful trading is a type of civil wrong found in UK insolvency law, under Section 214 Insolvency Act 1986.

Accounting Terms Beginning With "X"


A graph’s horizontal base which indicates the total number of units or other units of volume or activity for the amounts indicated by the y-axis.


X-efficiency describes a company’s inability to get the maximum output for its inputs due to a lack of competitive pressure.


Xenography is a dry electrostatic process used for making photocopies and for printing with a laser printer. In a plain-paper photocopier, an electrostatic image is formed on a plate (or cylinder) coated with selenium, which is then dusted with a resinous toner that selectively sticks to charged areas. The resulting image is then transferred onto


The Xu is a monetary unit of Vietnam; It’s worth one hundredth of a dong.

Accounting Terms Beginning With "Y"

Yankee Bond

A bond issued in the US by a foreign borrower.

Yaounde Convention

An international agreement by which many former French colonies became associates of the European Community.

Year End

Year end is the end of a business’s accounting year. It’s short for ‘accounting year end’.

Year Over Year (YOY)

Year Over Year (YOY) refers to the mathematical process of comparing one year of data to the previous year of data.

Yearling Bond

A UK local authority bond that is redeemable one year after issue.

Yellow Book

The colloquial name for Admission of Securities to Listing, a book issued by the Financial Conduct Authority (FCA) that lays out the regulations of admission to the Official List of the London Stock Exchange (LSE) and the obligations of companies with listed securities.

Yellow Knight

A corporation that at one time was planning on initiating a hostile attempt on a company, but instead decides to propose a merger deal between the two. This may be done for a variety of reasons, but mainly the company that was planning the takeover believes that another approach would yield better results.


The Japanese currency unit.


The annual income provided by an investment.

Yield Curve
Yield Spread

The difference between the yields on two bonds.


Yuan (CNY) is the standard monetary unit of China, and divisible into 10 jiao or 100 fen.


Short for “young urban professional” or “young, upwardly-mobile professional”. Yuppie is a term coined in the early 1980’s for a young professional person working in a city.

Accounting Terms Beginning With "Z"

Z Score

The Z Score is a multivariate formula used to gauge a business’s susceptibility to failure.


Zadj acts as a means of comparing the potential for defects.


A Zaibatsu is a Japanese conglomerate.


From the early 1960s to the late 1980s, Japan had one of the highest economic growth rates in the world. In the 1970s, the government began to deregulate the financial markets, which allowed banks to actively seek out new customers. During the mid-1980s, Japan took a loose approach to monetary policy, which caused the money

Zealous Witness

A zealous witness is a witness who gives testimony clearly biased toward the party that called him or her to testify.

Zebra Bond

A discount zero-coupon bond, in which accrued income is taxed annually rather than upon redemption.

Zero Air

Zero Air is air which has had hydrocarbons removed via a process of oxidative catalysis to ensure it only contains less than 0.1 parts per million (PPM) of total hydrocarbons.

Zero Balance Account

A zero balance account (ZBA) is a checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.

Zero Cost Option
Zero Coupon Bonds

A discounted bond that is traded and pays no coupon interest during its life.

Zero Coupon Convertible
Zero Defects

Zero defects is a Total Quality Management (TQM) philosophy that reinforces the notion that mistakes are not acceptable and aims to change workers’ attitudes to quality by stressing the importance of error-free performance.

Zero Discharge Technology
Zero Growth Stock

A stock that will return a set amount until it matures.

Zero Hour Contact

A zero-hour contract is an employment contract whereby an employee is not guaranteed any fixed working hours.

Zero Interest Rate

The monetary policy of maintaining a nominal interest rate of 0%.

Zero Proof Bookkeeping

Used in small businesses and by individuals. Method of bookkeeping with a zero balance at the end of the accounting period.

Zero-Based Budgeting

A cash flow budget in which the manager responsible for it’s preparation is required to prepare for and justify the budgeted expenditure from a zero base. i.e. assuming that initially there is no commitment to spend on any activity. Rather than the previous year’s budget being the starting point for the next budget, a zero-based budget assumes no activities: everything in the budget must be justified.


Denoting goods on which the buyer pays no VAT although the seller can claim back any tax he/she has paid.

Zero-Rated Business

A business that only supplies zero-rated goods and services. It does not charge VAT to its customers but it receives a refund of VAT on goods and services it purchases.

Zero-Rated Goods And Services

Goods and services that are taxable for value added tax (VAT) purposes but are currently subject to a tax rate of zero.

Zero-Sum Game

In game theory and economic theory, a zero-sum game is a mathematical representation of a situation in which each participant’s gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants.


A format for storing compressed versions of one or more files within a single archive file (a ZIP file). 

ZIP Code

The US version of a postal code. Code established by US Postal service to indicate each location. Has since been made 9 digits allowing more accurate identification of a location. Stands for Zoning Improvement Plan.


The standard monetary unit of Poland, divided into 100 groszy.

Zombie Debt

An arrangement or distribution of things into zones.

Zone Of Possible Agreement

In a negotiation or business discussion, that area in which the parties may eventually find common ground to resolve their differences and conclude a deal.

Zone Pricing

A pricing strategy in which which a company delineates two or more geographic areas (zones).


Zoning is the system of specifying that certain activities may only be carried out in particular areas.

Zoning Exception

Special permission permitting a structure to be built where it would whereby contravene zoning laws.