List of business and finance abbreviations Wikipedia

One example is a company receiving a monthly bank statement documenting deposits, withdrawals, and an account balance. In accounting, the profit margin is a good indicator of financial health. Knowing your profit margin ultimately can tell you whether or not there’s a market for what you’re selling.

Consolidation accounting is the method used for preparation of these financial statements. AR (Accounts receivable abbreviation) – An asset account on a company’s balance sheet representing money the company is owed by its customers. While accounting is all about numbers, they are not the only thing that matters to keeping your books in order.

ARR: Average Rate of Return

CT (Capitalization table) – A table that shows the ownership of a company’s equity shares. CPI (Consumer price index) – A measure of the average change in the prices of goods and services purchased by consumers. COGS (Cost of goods sold) – The amount of money spent to acquire or produce the goods a company sells. CIF (Cost, insurance, and freight) – Shipping term that refers to the cost of shipping goods plus the cost of insurance and freight. CFO (Chief financial officer) – The senior executive in a company responsible for managing its financial affairs. CFD (Contract for difference) – A financial contract that allows investors to bet on the difference between a security’s current and future prices.

• Departmental accounting will show the profit and loss for each sales area.
• A balance sheet is a financial report that lists your company’s assets, liabilities, and equity.
• CA (Abbreviation for checking account) – A bank account used for depositing and withdrawing cash.
• But, if you find yourself confused when reading a balance sheet or income statement, it might help to clarify the meanings of common terminology.

A worksheet is working paper accountants use as a preliminary step for preparing a financial statement. It assists bookkeepers and accountants in completing the accounting cycle and gathering year-end reports (adjusting trial balance and financial statements). Numerous people use worksheets to maintain accuracy and spot errors before compiling final reports. Profit is the financial benefit gained when the revenue generated from a business activity exceeds the expenses, costs, and taxes involved in maintaining the particular activity.

List of business and finance abbreviations

A measure of a company’s profitability is calculated without subtracting the interest expense and income taxes from its earnings. DR (Accounting abbreviation for debit) – An accounting entry in which assets or liabilities are more significant on a company’s balance sheet. DMT (Debt management team) – This entry in our accounting abbreviations list refers to the team responsible for managing a company’s debt. AP (Abbreviation for accounts payable) – A liability account on a company’s balance sheet representing money the company owes to its suppliers.

Because for those new to accounting, acronyms and abbreviations can be scary. (OK, scary might be too strong of a word, but you get the idea.) Let’s break down some of the most common accounting acronyms and abbreviations… A business produces receipts when it provides its product or service and it receives receipts when it pays for goods and services from other businesses. Received receipts should be saved according to IRS receipts requirements, and catalogued so that a company can prove that its incurred expenses are accurate. Accounts Payable include all of the expenses that a business has incurred but has not yet paid. This account is recorded as a liability on the Balance Sheet as it is a debt owed by the company.

The Investment and Accounting Acronyms from 95% of Industry Discussion Calls

The term Allocation describes the procedure of assigning funds to various accounts or periods. Of course, there are those basic accounting terms that don’t pertain to a particular financial statement. Cost of Goods Sold are the expenses that directly relate to the creation of a product or service.

CLF (Cumulative loss factor) – This entry in our accounting acronyms glossary describes a measure of the amount by which a company’s net losses have exceeded its shareholders’ equity. ACCT is one of the accounting acronyms that could have a double meaning since it can also be used as an abbreviation for accountant. In accounting, value is the monetary worth of an asset, business, goods sold, services rendered, or liability/obligation acquired. The procedure of calculating and assigning value to a company or asset is valuation.

Credit (CR)

Revenue (REV) is the income a business earns by selling products or services related to its main operations. Suppose a restaurant’s revenue covers all food and beverage sales. It will not cover additional forms of oracle warehouse management user’s guide income (liquidation of equipment or real estate owned by the business). While revenue and sales can be synonymous, revenue establishes the data point comprising the sales component of a price-to-sales calculation.

CBI (Confidential business information) – Information considered confidential because it could harm the company if it were to be disclosed to the public. CAPEX (Capital expenditure) – The purchase of long-term assets such as property, equipment, or technology. BO (Business organization) – The term refers to a company, partnership, or sole proprietorship. ASC (Accounting Standards Committee) – A committee of the American Institute of Certified Public Accountants that develops and updates accounting standards.

And if you’re ready to make some smart financial decisions this year, read an article that details five practical financial goals that you can start today. It’s time to roll up those sleeves and start building your accounting vocabulary. To help you get started, we compiled an assortment of basic financial terms and acronyms and created this simple accounting glossary for beginners. For example, a large manufacturer has $61 billion in revenue and $13.8 billion in net income. For every dollar earned in sales, the company retains $0.23 as profit. Invoices illustrate payment terms, unit costs, shipping, handling, and other terms outlined during transactions.

If Samantha wants to buy a smartwatch for $300, and the sales tax is 5% in her area, she will pay $300 for the watch. Suppose someone has the choice to receive $1,000 today or $1,000 in five years. They can choose to take the money now based on interest/return rate and inflation/purchasing power. For instance, if someone wants a $1,000 refrigerator, cash is the best asset that can easily be used to get it. However, suppose that person has no cash but a rare book collection priced at $1,000. In that case, they will likely not be able to obtain the refrigerator.