Financial Accounting: Account Glossary Prepared by Dr. Richard M.

Crowley, 2019
Sessions 1-4

1. Assets: What you own

a. Long Term (Non-current): Assets that can be used for at least 1 year, often called PP&E
i. Equipment: Equipment owned
ii. Factory: Factories owned
iii. Machinery: Machines owned
iv. Building: Buildings owned
v. Land: Land owned
b. Short Term (Current): Assets you could use up within 1 year
i. Cash (includes Cash at bank, petty cash, etc.): Money or money-like instruments
(such as checks)
ii. Accounts receivable, aka A/R: Amount owed to you by customers
iii. Inventory: what you have available to sell. Classified as current as long as you
can usually sell the inventory in a year.
iv. Prepaid rent expense: Prepaid right to use a building for a period of time;
shifted to rent expense when it is used up
v. Prepaid utilities expense: Prepaid right to use a certain value of utilities or to
use utilities over a period of time; shifted to utilities expense when used up
vi. Supplies: Small items like paper, pens, staplers, etc. needed for employees to do
their job
vii. Insurer: Right to be reimbursed by your insurance company (as compensation
for a negative event)
c. Contra asset accounts (Credit balance asset accounts)
i. Accumulated depreciation -- _______: Tracks depreciation on the specified
asset (fill in the blank with the asset’s account name); contra to the asset
ii. Allowance for uncollectible accounts: Contra to A/R, tracks the amount of A/R
we expect to not collect
2. Liabilities: What you owe
a. Long Term (Non-current): if ≥ 1 year to payment. If <1 year, move to Current liabilities
i. Loan payable: Loans you owe
b. Short Term (Current): if < 1 year to payment
i. Accounts Payable, aka A/P: Amount you owe to suppliers
ii. Wages payable, salaries payable: Amount you owe to employees
iii. Utilities payable: What you owe to the utility company
iv. Rent payable: What you owe to your landlord
v. Notes payable: Small, short loans that you owe money on
vi. Unearned revenue: Work you owe to someone else (that you've already been
paid for)
vii. Dividends payable: Dividends you owe to shareholders (declared but not yet
paid)
3. Equity: What you own minus what you owe
a. Permanent Accounts
i. Share capital, aka Paid in-capital: Amount shareholders invested in the
company at IPO or SEOs, less retired shares
1. Share capital (ordinary shares), aka Ordinary shares
Financial Accounting: Account Glossary Prepared by Dr. Richard M. Crowley, 2019
Sessions 1-4

2. Share capital (preferred shares), aka Preferred shares

ii. Additional paid-in capital, aka APIC: Additional investment from shareholders,
typically as a consequence of selling treasury shares
iii. Retained earnings: The amount of money generated by the company for
shareholders which has not yet been distributed as dividends
iv. Contra equity Accounts (to permanent accounts)
1. Treasury shares: When a company purchases its own stock and holds it
on its books; contra to Share capital, Share capital (___)
b. Temporary Accounts
i. Dividends: Distribution of retained earnings to shareholders
ii. Revenues
1. Revenue: Revenue from primary business operations
2. Service Revenue: Revenue from service operations. If the company
only has service operations, Revenue can be used instead.
3. Interest revenue: Revenue from interest received on bank account or
loans you gave out
4. Dividend revenue: Dividends you received
iii. Expenses: Using something up
1. Wage expense, salaries expense: Use of employee’s work
2. Utilities expense: Use of utilities
3. Rent expense: Use of renting a location
4. Cost of goods sold, aka COGS: Use of inventory
5. Miscellaneous expense, aka Misc expense: Use of miscellaneous things
like lunches, entertainment, business trips, etc.
6. Depreciation expense: Use of non-current assets
7. Maintenance expense: Use of maintenance work
8. Interest expense: Use of loans (interest paid on loans)
9. Tax expense: Taxes
10. Bank service charge: Use of banks (for bank fees)
11. Bad debt expense: Expense from A/R you don’t expect to get paid from
iv. Gains
1. Gain: Generic account for gains
2. Gain on sale: Gains from selling PP&E
3. Gain on re-estimation of uncollectible accounts: Gains from decreases
in needed allowance for doubtful accounts
v. Losses
1. Loss: Generic account for losses