Top Ten Accounting Terms

Understanding the key accounting terms will help you to get the most out of your accounting process and to figure out the best way to reconcile your transactions (analyse and record payments from the bank statement to your accounts).

10 Key Accounting Terms

1. Debit: Represents an increase in asset and expense accounts, or a decrease in liability, equity, and revenue accounts.. 
2. Credit: Represents an increase in liability, equity and revenue accounts, or a decrease in asset and expense accounts.
3. Assets: Resources with a monetary value that a company owns, such as cash, accounts receivable, and property.
4. Depreciation: The reduction in value of an asset over the period of its useful life
5. Liabilities: Amounts that a business owes to others, including accounts payable, loans, and wages.
6. Equity: The value of a company left over after all liabilities are subtracted from all assets.
7. Revenue: The total amount of income generated from a business's operations.
8. Expenses: The costs a business incurs to generate revenue.
9. Balance Sheet: A financial statement that shows a company's assets, liabilities, and equity at a specific point in time.
10. Profit and Loss Report : A statement that summarises income and lists expenditure, then calculates the profit or loss over a specific period.