Dictionary of Accounting Terms

Term Description
Appropriations Distribution of profit to shareholders, partners or members of a Close Corporation
Asset What you or the company own
Balance Sheet A statement of listed Assets, Liabilities and Funds employed
Is the money used to finance a business. It can be in cash or assets - which arenot of
Capitals
a Revenue nature; hence Capital Expenditure.
Cash Flow Statement The movement of cash for a period, i.e. cash received and cash paid out
This is unique to the Republic of South Africa - an anonymous association formed in
Close Corporation
order to limit the liability of members; it is limited to 10 members
An anonymous association formed in order to limit the liability of the shareholders, who
Company
are the investors in a company. (Shareholders participate in the profit of a company)
Credit In Accounting, is a - (minus)
Creditor You or the company owe money to the Creditor
Loans made to the company by the public, either secured or unsecured; they can be
Debenture
secured on fixed property or a notarial bond on moveable property
Debenture Holders Loan holders who earn fixed interest
Debit  In Accounting, is a + (plus)
Debtor Owes you or the company money
Another word for Salary. By convention, workers earn wages, senior employees earn
Emoluments
salaries, directors earn emoluments
The interpretation and comparison of this year’s, against last year’s figures, stated in the
Financial Interpretation
form of a ratio or a percentage
This includes all the reports, i.e. the Balance Sheet, Trading Account, Income Statement
Financial Statement
and all the various Schedules, etc.
The main ledger where all transactions are summarised, (also called a private ledger);
transactions of the General Ledger are extracted from subsidiary books; the financial
General Ledger
reports, e.g. the Balance Sheet and Income Statement, are extracted from the General
Ledger
An intangible asset, based on the ability of a business to earn profit above the ‘norm’,
Goodwill
(these above-average earnings are also known as ‘super profit’)
Income Statement A statement of Income and Expenditure, showing gross profit and net profit
Liabilities What you or the company owe
Limited Usually abbreviated to Ltd., indicates a limited liability company
An association between two or more people, where the partners are personally liable for
Partnership
all the debt of the association
Usually abbreviated to (Pty.) Ltd., is a Private company limited to 50 members in South
Proprietary Limited
Africa
A definite liability which cannot be accurately assessed at the time of the Financial
Provisions
Statement
Public Company A company where the number of shareholders are unlimited
A virtual disc (as opposed to a physical or logical disc), which is created in memory, to
RAM disc
hold data which is accessed very often. It has the effect of speeding up processing.
The allocation of Profits to provide for future requirements or happenings to a company;
Reserve it is allocated before Appropriations. Capital Reserve can be distributed in special
circumstances, Revenue (or normal) Reserve can be distributed freely
Revenue The Income received in the normal course of business, which is of a non-Capital nature
The Expenditure incurred in the normal course of business - which is of a non-Capital
Revenue Expenditures
nature; it is written off against Income
Schedules Detailed listing of Expenditure, Income and Assets or Liabilities
Sole Trader This is a one-man partnership
Statutory Written law, passed by parliament

1
Statutory profit and loss Is the minimum information required by the Companies Act
Also known as a Profit  and Loss Account, is a list of Income against Expenditures, or
Trading Account
an Income Statement
A trial balance is a list of all the accounts for a period, to test that the Debits agree with
Trial Balance
the Credits

Source: http://www.smartaccountingsoftware.com/Acctterm.aspx