Finance & Accounting Glossary

Accounts Payable

Money a company owes to its suppliers or vendors for goods and services already received.

Accounts Receivable

Money owed to a company by its customers for goods or services already delivered.

Accrual

Revenue or expenses recorded when they're earned or incurred, regardless of when cash actually changes hands.

Amortisation

The process of spreading a loan's cost over time through scheduled payments covering both principal and interest.

Balance Sheet

A financial statement showing what a company owns, what it owes, and what's left for shareholders — at a specific point in time.

Basis Point

One hundredth of a percentage point (0.01%), used to express small changes in interest rates, yields, and fees.

Cash Flow

The movement of money into and out of a business over a specific period.

Depreciation

The accounting process of spreading the cost of a physical asset over its useful life.

EBITDA

Earnings before interest, taxes, depreciation, and amortisation — a measure of a company's operating profitability.

Equity

The value of ownership in an asset or company — what's left after subtracting what's owed.

Fiduciary

A person or entity legally obligated to act in the best interest of another party.

Gross Margin

The percentage of revenue remaining after subtracting the direct cost of producing goods or services.

Ledger

A complete record of all financial transactions for a business, organised by account.

Liability

A financial obligation that a company owes to an outside party.

Revenue Recognition

The accounting rules that determine when a company can officially record revenue on its financial statements.