LIST OF VOCABULARIES

(taken from english4accounting.com with some adjustments)

INTRODUCTION TO ACCOUNTING

Annual financial statements = the set of accounts which are prepared each year
Example: Once a year the shareholders review the annual financial statements to see if the company
made a profit or loss.

Auditor = a specialist whose job is to carefully check the accounts and accounting practices of a
company
Example: The entire department were scared when the team of auditors arrived and asked to see all
of the previous year's records.

Bookkeeper = a person, who may or may not be qualified, that records the financial transactions of a
business
Example: A lot of smaller companies use bookkeepers for their daily accounting needs and only use
an accountant for the yearly financial statements.

CA (chartered accountant) = a fully qualified accountant, holding current certification

Example: When the bank asked for confirmation that John would be able to repay the loan, his
chartered accountant provided it.

Code of conduct = a set of rules (often used within a company) which show the correct way to
behave
Example: All employees must follow the company's code of conduct.

Confidentiality = the state of being secret and/or kept secret

Example: James was dismissed when he broke confidentiality and told his wife that the company was
having financial problems.

Creative accounting = the use of holes in financial law to have an advantage or to show figures in a
deceptive way
Example: Some accountants often use creative accounting to try and cheat the tax authority out of
monies due.

Income tax = the tax which is due on personal earnings

Example: Most people complain about the rate of income tax, but for those earning over 40,000 a
year who have to pay 32% it is an even less comfortable situation.

Local accounting standards = the set of rules and laws for a country which govern how accounts
should be prepared
Example: Multinational corporations need to be aware of the local accounting standards of each
country they operate in.

Management accountant = a senior member of the accounting team, who liaises with company
owners / directors and advises on the financial aspects of any planned action

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A type of accountant that helps managers of a company make decisions by measuring, analyzing,
and reporting financial and nonfinancial information
Example: After the meeting with the management accountant, I realized that launching the new
product line didn't make financial sense.

Payroll clerk = the member of the accounting team who deals with employees
Example: The sales-director asked the payroll clerk to issue bonuses to the top five sales people.

Purchase ledger clerk (U.S. accounts payable) = the member of the accounting team who deals with
suppliers, issues payment for goods and services and keeps track of expenditure
Example: When the supplier contacted the company to ask why the invoice wasn't paid, the
purchase ledger clerk explained that the cheque was in the mail.

Sales ledger clerk (U.S. accounts receivable) = the member of the accounting team who deals with
sales, raises invoices and collects payment
Example: The sales ledger clerk made sure to issue the invoice on the same day as the sale.

Tax advisor = a specialist who is able to give advice on matters of taxation

Example: Larger corporations often have a dedicated tax advisor to help them minimize the amount
of tax that they need to pay.

VAT (value added tax) = the tax which is due on the difference between the value of a product or
service and the cost of its production
Example: The government are talking about increasing the value added tax rate next year, which
means the cost of consumer goods will increase.

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MAKING A CAREER IN ACCOUNTING

Balance sheet (statement of financial position) = a document which summarizes the assets,
liabilities and equity of a business entity at a given time
Example: The analysis of balance sheets for the last three months showed an increase in the value of
the company.

CPA (certified public accountant) = the American and Australian equivalent of a Chartered
accountant
Example: After James passed his exams, he became a certified public accountant.

CFO (chief financial officer) = the most senior financial manager, responsible for overseeing the
financial activities of the entire company
Example: The board of directors were satisfied with the CFO's explanation of the unexpected loss
reported in the accounts.

Credit = an entry showing the amount of money owed to the company by its customers
The right side of an account, commonly abbreviated as Cr.
Example: The sales ledger clerk totaled the credits and saw that the company was owed over $1
million.
An account shows a credit balance if the credit amounts exceeds the debits

Debit = an entry showing an amount owed (due to be paid by the company), entered on the left
hand side
The left side of an account, commonly abbreviated as Dr.
Example: Before we can pay the invoice, we need to record the invoice as a debit in the accounting
system.
An account shows a debit balance if the debit amounts exceeds the credits

Deferral = the state for postponing the recognition of an asset or liability until a future time
Example: As his accountant hadn't finished the tax calculations, he applied for a deferral.

Double taxation = the state where income tax is paid twice (often to two different governments) on
one income
Example: A lot of countries now have double taxation agreements, so people should only pay the tax
in the country where the money was earned.

Due diligence = reasonable actions taken by a person to satisfy a law or regulation

Example: The accountant suggested not signing the final contract until all due diligence was done to
check that the company would be profitable.

Foreign currency = the money used in another country.

Example: Because the company had offices in Spain, Brazil and America, they had to deal with
several foreign currencies including the euro.

In excess of = more than, greater than

Example: The most recent set of accounts reported a net profit in excess of $5 million.

LLC (limited liability company) = a business entity where the debts of the company are separate
from the debts of the share-holder

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Example: As it was a Limited liability company, the creditors couldn't get at John's private assets
when the company went bankrupt.

Reconcile = to ensure that two figures agree with each other

Example: A lot of accounting departments reconcile the bank account to the accounts every day.

Record = a written account of a transaction

Example: The auditors went through every record of sale over the last decade before they were
satisfied.

Sole-trader = a business which is owned and run by one person

Example: Sole-traders don’t have to meet such strict accounting requirements as larger
corporations.

Trial balance = a statement of all debits and credits in the double-entry account book, with any
discrepancies shown
A list of accounts and their balances at a given time
Example: The company accountant spent two days trying to get the trial balance to agree.

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BOOKKEEPING

Asset = a resource in the possession of a company which is available for use

Example: The auditors checked the factory to make sure that all the assets listed in the accounts
were there.

Authorize = to give permission to happen

Example: All purchases over five thousand dollars must be authorised by accounts payable.

Daybooks = a journal of financial transactions entered on the day that they happened
Example: I hate working with daybooks, it is so much easier to use a computerised accounting
system.

Double entry bookkeeping = a system of keeping financial records where each transaction has a
debit and a credit posted
Example: The majority of experienced bookkeepers use double entry bookkeeping as it allows them
to check that both sides agree.

Ensure = to make certain that something happens

Example: All business owners should ensure that their tax returns are received by the Inland
Revenue by 30th April.

Expenditure = all monies spent

Example: The director stopped the lunch programme for employees so he could reduce expenditure
and save money.

Income = all monies received

Example: The company is looking for a way to increase its income, so they are talking about
expanding into a new market.

Incorrect = wrong, false

Example: John wasn't paying attention so the answer he got was incorrect.

Liability = a company's debt or obligation

Example: The company shut down when the accounts showed that the liabilities were larger than
the income and assets.

Nominal code (chart of accounts) = a reference number which allows the grouping of financial
transactions
A chart that lists the accounts and the account numbers that identify their location in the ledger
Example: It took me ages to remember all of the nominal codes, but now I do it is much quicker to
enter invoices into the system.

Post = to make an entry in an accounting ledger or software system

Example: When you post a transaction in the system, the programme will automatically post the
second side of it.

Return = a form which is submitted to a tax authority

Example: When James had finished the clients' tax return he gave it to his supervisor to check before
sending to the Inland Revenue.

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Single entry bookkeeping = a simple system of keeping financial records, where transactions are
entered only once
Example: As Bob wasn't very good at maths he used single entry bookkeeping to keep track of his
daily transactions.

T-accounts = an informal word for a set of financial records using double entry bookkeeping, with
debits entered on the left and credits on the right
An account that consists of 3 parts: a title, a left (debit) side, and a right (credit) side
Example: You should remember that each T-account should balance. If it doesn't, there must be a
mistake somewhere.

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MANAGEMENT ACCOUNTING

Additional = in addition to, extra

Example: His promotion will mean additional work, but also additional pay.

Assist = help, or make easier

Example: Having correct and timely financial information assists in making operational decisions.

Benchmarks = a standard by which something can be measured or assessed

Example: The recently released 2012 earnings benchmark figures show that CPAs are earning more
than in 2011.

Budgeting = the process of creating set financial targets which should be met
Example: A lot of companies fell short of the budgeting expectations because of the unexpected
impact of the financial crisis.

Draft = prepare a written version of

Example: The lawyer drafted the contract and sent it to his client for approval.

Entity = a person, partnership, organization, or business that has a legal and separately identifiable
existence
Example: A limited company is a separate legal entity from its members.

Forecast = estimate or calculate in advance

Example: By studying the previous year's accounts and considering any changes in the market, you
can forecast the financial state of the company 12 months in advance.

In-depth = carefully worked out, detailed or thorough

Example: Management accountants need an in-depth knowledge of finance and management as
well as accountancy to be successful.

Indicate = show, be a sign of

Example: The financial report indicates that the company has exceeded its expectations.

Management accounting = the process of preparing management reports and accounts that provide
accurate financial and statistical information
The process of measuring, analyzing, and reporting financial and nonfinancial information that helps
managers make decisions to fulfill the goals of an organization
Example: The management accounting team finished their analysis of production costs and
presented their findings to the board of managers.

Overheads = the ongoing administrative expenses of a business which cannot be matched to any
specific business activity
Example: In an attempt to try and reduce overheads the company switched water suppliers and
cancelled the 'free lunch' programme for staff.

Period = an interval of time characterized by the occurrence of a certain condition, or event

Example: The accounting period for tax reporting is 12 months from the 1st of January.

Risk = the possibility of suffering harm or loss

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Example: It is important to minimize the risk to a company by having all the relevant information
before making a decision.

Takeover = the transfer of control of a firm from one group of shareholders to another group of
shareholders
Example: AOL's takeover of Timewarner was one of the largest acquisitions in business history.

Variance = the difference between two figures

Example: The company expected costs to be 100,000 but the actual costs were 120,000 so the
director asked about the reason for the variance.

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THE ACCOUNTING EQUATION

Accounting equation = the foundation of double entry accounting which shows that all assets are
either financed by borrowing money or paying with the money of the company's shareholders
Assets = Liabilities + Equity
Example: The accounting equation was the first thing I learnt on the bookkeeping course I went on.

Capital = the total financial value of all assets less any liabilities. The net worth of a company
Example: After three years trading the capital of the company had increased to $100m.

Contingent liabilities = a potential obligation that may be incurred depending on the outcome of a
future event
Example: The management accountant estimated a contingent liability of $45,000 on the purchase
of the new property.

Current assets = all assets that are expected to be converted into cash within one year of normal
business activity
Example: Of course you cannot depreciate current assets as they won't be in the company a year
from now.

Draws (drawing) = the withdrawal of business cash or other assets by the owner for the personal
use of the owner
Example: The accounting team tried to explain that the owner shouldn't make so many draws from
the company as it was leading to huge losses.

Goodwill = the favour or advantage that a business has acquired especially through its brands and its
good reputation
Example: The company had assets of $62 million excluding goodwill.

Income statement = the financial statement which measures a company's financial performance
over a specific accounting period
Example: After studying the income statement it was clear that the company was in financial
trouble.

Incur = come into or acquire (some consequence, usually undesirable)

Example: The company has incurred taxes of $27,000 this quarter.

Intangible asset = an asset which is not physical in nature

Example: The valuation team had trouble valuing the intangible assets of the firm.

Intellectual property = creations of the mind: inventions, literary and artistic works, and symbols,
names, images, and designs used in commerce
Example: Lawyers and accountants in Hollywood have to be experienced in intellectual property law.

Quantify = determine or express the quantity of

Example: When entering a new market, you should be able to quantify the potential sales and the
risk attached to them.

Shareholder equity = a firm's total assets minus its total liabilities

Example: The board of management was delighted with the 15% rise in shareholder equity on the
past year.

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Sole proprietorship = a type of business entity that is owned and run by one individual
Example: Many people choose to form a sole proprietorship as it is the simplest form of business
entity.

Terminology = the vocabulary of technical terms used in a particular field

Example: There is some very complicated terminology in accounting so you should make sure you
have a good dictionary.

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DEPRECIATION AND AMORTIZATION

Accelerated depreciation = a term used to show that the reduction of an assets value happens faster
at the start of its useful life than at the end
Example: Assets like vehicles lose a lot of value in the first year of their life, which is why accelerated
depreciation is such a useful tool.

Accrual accounting = an accounting method that measures the performance and position of a
company by recognizing economic events regardless of when cash transactions occur
Example: The accountant advised to operate an accrual accounting system for the small start-up, as
he said it gave a more accurate picture of the true financial state.

Allocate = distribute according to an existing plan

Example: After studying the budget, it was clear that the marketing department had been allocated
more than was needed.

Amortization = the deduction of capital expenses incurred on an intangible asset over a specific
period of time
The process of allocating the cost of intangibles
Example: The accounts department started the amortization process as soon as the purchase of the
licenses was finalized.

Annuity depreciation = a method of depreciation centred around cost recovery and a constant rate
of return upon any asset that is being depreciated
Example: Most production machinery is depreciated using annuity depreciation as it allows the
calculation of a per unit produced cost for the asset.

Carry over = transfer a sum relating to one account to a new column, page, year
Example: When preparing the accounts for each year, you must remember to carry over the
balances from the previous year’s depreciation account.

Cash-flow = the movement of money into and out of a company, firm or legal entity
Example: When you apply for a bank loan, you will need to provide cash-flow records showing your
financial situation.

Depreciation =the process of allocating to expense the cost of a plant asset over its useful (service)
life in a rational and systematic manner
Example: Recognizing depreciation on an asset does not result in an accumulation of cash for
replacement of the asset

Determined by = decided by or because of

Example: Our decision to stop production was determined by poor sales over the past year.

Divide = split into equal parts or groups

Example: If you want to know your hourly salary, divide your weekly wage by the number of hours
you work.

Finite life = a lifespan which is limited to a certain number of years, months, weeks or days
Example: Most assets have a finite life, as eventually they will break or need to be replaced.

Multiply = increase the number of by the power of x

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Example: If you multiply two by three, you'll get six.

Net-book value = the current value of an asset shown in the accounting documents
Example: The car was purchased in 2011 for $30,000, now only one year later the net-book value is
$22,000, which shows a depreciation rate of $8,000 in year 1.

Salvage value = the amount of money that an asset will be worth at the end of its useful life
Example: The company purchased a $16,000 forklift for use in its warehouse and believes it'll be able
to resell the forklift for a salvage value of $1,000 at the end of 8 years.

Straight line depreciation = the method for reducing the value of a tangible asset by equal amounts
over its useful life
Example: Not having much experience in accounting, he chose the straight line method of
depreciation as it appeared to be the easiest to understand.

Sum-of-years-digits depreciation = the method for reducing the value of a tangible asset by a
variable percentage depending on how long the asset has been on the books
Example: A lot of people are put off of the sum-of-years-digits method of depreciation as it can seem
complicated, but it does have some advantages.

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FINANCIAL STATEMENTS

Bank reconciliation = the process of comparing the actual state of the bank account with the bank
nominal code in the accounts
Example: After James had finished the bank reconciliation, it became clear the company had a major
cash flow problem.

Cash in hand = the amount of liquid equity held by an entity at a certain point of time
Example: The accounts showed a large profit for the year, but as the company had spent a lot on
new assets there was a lack of cash in hand.

Cross-check = verify by comparing two sets of data

Example: Each month the accounts supervisor cross-checks the records which were posted against
the nominal code assigned.

Draft = a first version

Example: The financial director looked at the draft set of accounts and then approved them.

Invoice = the written record of a payment due, which is sent to the customer before payment
Example: The company issued a pro-forma invoice, with 14-day payment terms, when the order was
confirmed.

Irregularities = defects, failures of mistakes

Example: If the IRS finds any irregularities in your tax calculations, you can be fined.

Keep track of = follow, or pay attention to (particularly in changeable situations)

Example: Working in a multi-national accounting department, you should keep track of the exchange
rate at all times.

Ledger control = a process in which totals from subsidiary nominal accounts are entered into a
control account to make it easier to interpret the data
Example: The financial controller does the ledger control for the company as the first step in his
management accounting.

Ledgers = accounting books in which accounts were prepared

Example: Each accounting function maintains a separate ledger.

Meticulously = carefully paying attention to every detail

Example: The auditors meticulously studied the accounting records looking for anything suspect.

Notes to the accounts = additional information added at the end of the accounts to give a full
understanding of the company’s situation
Example: The management board studied the notes to the accounts to make sure they understood
the workings properly.

Receipt = the written record of a payment made, which is given to the customer after payment
Example: The company will only reimburse staff for petty cash purchases if they provide a receipt.

Retain = keep in one’s possession

Example: Mr Smith decided not to invest the profit from the last year so he retained it in his bank
account.

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To file = officially submit a document to a legal entity
Example: The latest date for filling your tax return is the 31stof March, so ensure that you have it
finished and sent by the 29th.

To post = enter or record (a financial transaction)

Example: Peter was posting the previous day’s sales into the system when his manager arrived.

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AUDITING

Abnormality = something which is not typical or appearing to be right

Example: Several abnormalities were discovered during the audit, which resulted in the company
being taken to court.

Act on = do something as a reaction

Example: The board decided to act on the performance auditor's recommendations and instituted
new purchasing procedures.

Adhere to = follow or obey

Example: Each company should adhere to the accounting standards of the country that they operate
in.

Audit = an examination of records or financial accounts to check their correctness

Example: The IRS audit will take place next week, so make sure all documentation is ready by then.

Control = a standard of comparison for checking or verifying the results

Example: The company has several control systems in place to ensure theft does not happen.

Defraud = illegally take money from someone by using deceit

Example: Mr Franks was convicted of defrauding the company out of millions.

Itemization = to place individual items as a list

Example: Itemization of expenses helps in identifying areas of high cost.

Objectivity = the state of being uninfluenced by emotions or personal prejudices

Example: Audits are often performed by external auditors to maintain objectivity.

Outcome = the end result

Example: The outcome of the meeting was the decision to relocate to Brazil.

Sloppy = untidy or with mistakes

Example: James was fired for being too sloppy in his work, after it was noticed that he had made
several serious mistakes.

Sound = having a firm basis

Example: John has a sound knowledge of financial matters but he has never dealt with an IRS audit
so the CFO insisted on being present during the audit.

Statistical sampling = the process of checking an entity based on a small amount of data taken at
random
Example: The auditor chose one month at random for statistical sampling.

Transparency = the state of providing clear visible information to all involved in an activity
Example: Increased transparency in the accounting department has increased shareholder faith in
the company.

Validity = being correct and valid

Example: The validity of the accounts was questioned by the IRS and an audit was performed.

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Verify = prove the truth of by presentation of evidence or testimony
Example: The accounts manage must verify all payments over $10,000.

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CURRENCY

Accrue = to be added over a given period

Example: Interest on the loan accrues over the 10 year term.

Acquire = to come into possession or ownership of, to buy, to purchase

Example: The company has acquired several buildings on the island.

Barter = to trade by exchanging goods rather than money

Example: Before money was common, people often bartered with animals like goats or cows.

Bond = a certificate of ownership of a specified amount which can be redeemed

Example: Treasury bonds are a popular form of saving in the US.

Charge = a fee, cost or expense which has to be paid

Example: Going over ones overdraft usually incurs a small charge.

Cryptocurrency = a currency which is designed around exchanging secure information rather than an
actual item
Example: BitCoin was the world's first cryptocurrency.

Decentralize = to distribute the powers of a central organization over a wider area

Example: A lot of companies decentralize certain functions like HR as it is more effective to have HR
departments in all locations instead of only at the head office.

Designated = previously named or selected for a certain function

Example: Mr. Smith is the designated representative for your area, so please contact him with any
complaints.

Determine = to decide upon

Example: We need to determine the best course of action to deal with this problem.

Endorse = to sign ones name on a commercial document

Example: After the accounts manager endorses your payment request, it will be processed.

Fluctuation = constant changes and instability

Example: Fluctuations in the exchange rate mean that the value of a currency is never predictable.

Freeze = to stop or limit the use of

Example: After he had been accused of fraud, the government froze his assets to prevent him
spending the money.

Incentive = something which provides stimulus or encouragement to do something

Example: The company offers a range of incentives, such as commission and flexi-time to motivate
staff.

Instrument = a means by which something is effected or done

Example: The government has several instruments for ensuring compliance with tax regulations.

Merchant = a storekeeper, retailed or wholesaler. One who sells products

Example: More and more merchants accept American Express as a payment option.

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Require = to need or have need of
Example: A lot of companies use e-invoicing nowadays and don't require a paper copy.

Seizure = taking possession of an item or monies legally or by force

Example: The government's seizure of his estate came as a surprise to his wife.

Third Party = a person or organization who is involved in a legal matter by chance or to a small
degree
Example: The contract is between the bank and you, it doesn't take account of any possible third
parties.

Transaction = an item of business which has been carried out or conducted

Example: The acquisition of K&M was the largest transaction in the history of the firm.

Variable = something which does not remain fixed or stable

Example: An uncertain exchange rate, unknown order quantity and indefinite payment terms are all
variables which make doing business with them problematic.

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PROFESSIONAL RELATIONSHIPS

Arrears = money that is owed or should have already been paid

Example: As he was five months in arrears on his payments, the company repossessed his car.

Authorization = official permission for something to happen

Example: The payment was a week late because the financial director only gave authorization to pay
it yesterday.

Breach = the act of breaking a law, promise or other agreement

Example: The company was taken to court for breaching the contract.

Creditor = someone who money is owed to

Example: As the invoice hadn't been paid the creditor started legal proceedings.

Debtor = someone who owes money

Example: We have 5 long-term debtors who owe us a total of $175,000.

Discrepancy = a difference between two things that should be the same

Example: While processing the invoice, John noticed a discrepancy in the number of units ordered
and delivered.

Dispute = an official argument or disagreement between two or more parties

Example: The court looked into the details of the dispute over payment.

Exceed = to be greater than a number, or go beyond a limit

Example: If an order exceeds $10,000 it is eligible for a 5% discount.

External = of, or coming from the outside

Example: There are several external bodies which regulate financial accounting.

Incentives = something (often financial) that encourages a person to do something

Example: The company pays incentives to staff to try and motivate them.

Internal = of, or coming from the inside

Example: Management accounting generally deals with internal reports.

Outstanding = not yet paid, solved or done

Example: The outstanding debt was paid and the account balance returned to zero.

Oversight = a mistake made by a failure to notice something

Example: It appears that there has been an oversight and the clerk forgot to mail in the VAT return.

Refer = to send someone to a different person or place for help

Example: I am afraid I do not have the authority to make that decision, I will have to refer you to my
supervisor.

Remit = to send money to someone

Example: We have to remit all tax payable for the period by the 21st April.

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Supplier = a person, company or body that provides goods
Example: As they were not happy with the quality of goods, they decided to change their supplier.

Term = a period of time during which something lasts or can last

Example: Our standard payment terms for invoices is 21 days.

Timely = happening at a suitable moment

Example: All reports must be filed in a timely manner.

Vital = very important

Example: The accounting department is vital to the success of a company.

Withhold = to refuse to give, or keep back something

Example: The company withheld payment as they were not satisfied with the quality of the goods
delivered.

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COST ACCOUNTING

Anticipate = to imagine or expect that something will happen

Example: Shareholders are anticipating a record dividend payment this year.

Appreciable = large or noticeable enough to have a significant effect

Example: The crisis has had an appreciable effect on the financial market.

Attributable to = caused by or connected to

Example: The company's success is attributable to the new CEO's leadership.

Bottom-line = the final line in the accounts, the net profit or loss made by a company
Example: The CFO is working on minimizing the effects of the scandal on the bottom-line.

Breakeven point = the figure at which neither profit or loss is made

Example: By calculating the cost of production, we found the breakeven point of $5.35 per item.

Budget = a plan that shows how much money you have, will have and what it will be spent on
Example: Corporate planners are preparing the budget for the next financial year.

Classify = to divide things into groups according to their type

Example: Costs are classified into two groups, direct and indirect.

Cost accounting = the process in which all costs are examined

The process of measuring, analyzing, and reporting financial and nonfinancial information related to
the costs of acquiring or using resources in an organization
Example: Most large companies use cost accounting to help save money and maximize efficiency.

Cost reduction = the process of minimizing any expenses due from direct business activity
Example: In times of hardship, cost reduction is essential to a company's success.

Costs incurred = any expenses due as a direct result of business activity

Example: By looking at costs incurred on a particular product, we can see where money can be
saved.

Feasibility = the possibility that can be made, done or achieved or is reasonable

Example: The management accountant is looking into the feasibility of outsourcing bookkeeping.

Implement = to put into effect

Example: The new legislation will be implemented next year.

Matching principle = the idea that expenses should be allocated to a revenue stream where possible
Example: The matching principle should be followed in order to reach accurate net income figures.

Notional = existing as an idea or as an approximate amount

Example: I'm sorry but I cannot give you an exact figure, but the notional amount is 560,000.

Opportunity costs = the imagined loss made on not following a certain course of action instead
Example: We cannot afford to expand into both markets so please find out the opportunity cost of
expanding into Iran instead of Iraq.

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Overall = in general rather than in particular
Example: We need to study the overall costs and locate an area in which savings can be made.

Project = to calculate an amount or figure expected in the future based on information in the
present
Example: The financial team projected net earnings of over $750,000, if it happens it will be a record
for the company

Relative = as judged or measured in comparison with something else

Example: Taking the two ideas into consideration, the relative merits of the first are clear.

Successive = happening one after another

Example: The company has made successive losses in the past five years.

Underlying = real but not immediately visible

Example: Investments are made by evaluating the underlying value.

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INVESTMENTS

Blue-chip = considered to be a safe investment because of previous performance

Example: Even blue-chip companies like Apple and Unilever are struggling as a result of the crisis.

Bonds = an amount of money that a government or individual borrows and agrees to repay at a
certain date with a certain amount of interest
Example: Some investors cannot hold bonds with a risk rating worse than A.

Boom = a period of sudden economic growth

Example: Property investors became rich during the 1980's property boom.

Broker = a person who acts in representation when buying or selling shares, insurance etc
Example: His stock broker advised him to invest in KBL industries.

Commodities = substances or products which can be traded in large quantities

Example: Higher commodities profits increased first quarter profits.

Default = to fail to pay interest or other money that is owed

Example: As the company defaulted on the loan payments, legal proceedings were started.

Diversify = to put money into a range of different types of investment to reduce risk
Example: Fortunately, he diversified his investments by buying shares and property so he wasn't as
badly affected when the property market crashed.

Fund = money invested in a range of shares, bonds etc along with other investors money
Example: The fund's performance is linked to the NY stock exchange.

Holding = a specific investment

Example: The company has many holdings in China.

Index fund (also known as a tracker) = a sum of money invested in a stock index, for either an entire
market or a segment of that market
Example: The best that the average investor can do is buy an index fund and hold it forever.

Maturity = the time when an investment becomes ready to be paid

Example: We can offer investments with 2, 4, 10 or 25 year maturities.

Plummet = to drop, decrease or fall very rapidly

Example: The shares plummeted by 24% causing the shareholders to lose millions.

Portfolio = a collection of different investments owned by a person or company

Example: Many investors now try to build up portfolios with many types of investments.

Resistant = not easily changed or damaged

Example: Traditionally the market for gold has been resistant to financial downturns.

Return = profit produced by an investment

Example: The return on the investment was almost 11% which made it one of the most profitable.

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Rocket = to increase or rise quickly
Example: House prices are rocketing which means that they are good investments.

Slump = a period of low economic activity

Example: Having a varied investment portfolio helped him to survive the slump.

Startup = a business that has just started

Example: Most startup's go bankrupt within the first two years.

Volatile = likely to change suddenly and unexpectedly

Example: Property has always been less volatile than shares.

Yield = the total amount of profit produced by a business or investment

Example: All investors are looking for maximum yield with minimum risk.

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BUDGETS

Adverse = having a negative or harmful effect

Example: Recent bad publicity had an adverse effect on the company's sales.

At their disposal = available to be used by somebody

Example: The company has millions of dollars at its disposal to fund new research.

Carry out = to perform or complete a job or activity

Example: The IRS carried out an audit of the company as a result of errors in the accounts.

Contrast = to compare with an aim to showing the differences

Example: By contrasting this years' expenditure with last years', we will see the main differences.

Cover = to deal with or to include something

Example: You need to ensure that the report covers all possible costs.

Cyclical pattern = a trend which is repeated at intervals

Example: Changes in the economy have followed a cyclical pattern.

Designated for = stated as officially having a particular purpose

Example: This building has been designated for the accounting team.

Drawing up = officially preparing a written document

Example: The lawyers drew up the contract of sale.

Dynamic budget = a financial forecast which adapts to changes of one or more variable
Example: Dynamic budgets have become more popular since it is increasingly difficult to precisely
forecast sales volume.

Eliminate = to completely remove something which is not wanted

Example: It is impossible to eliminate all risk in investment so you should seek advice on the safest
options.

Go ahead = to continue or proceed

Example: The meeting went ahead when John returned.

Go over = to look at in detail, to study

Example: After going over the budget, it is clear that we will not meet our sales targets.

Margin of safety = the amount by which sales can decrease before a company becomes unprofitable
Example: As our margin of safety is only 10,000, we need to look at ways of increasing sales.

Marginal cost = the cost of producing one more item as compared to the cost of producing all items
Example: Marginal costs are generally relative to the amount of fixed costs.

Omission = the failure to include or do something

Example: The omission of the depreciation cost for the year meant the budgeted figures were not
correct.

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On account of = because of, due to
Example: The company was closed on account of low sales and high costs.

Ran into = encountered unexpectedly

Example: The company ran into financial problems when the exchange rate changed significantly.

Referred to = checked or consulted a source of information

Example: "I'm afraid that I do not know, I will need to refer to my manager for that answer."

Set aside = to save something for a special purpose

Example: The management have been setting $500 a month aside for the staff party.

Setting out = arranging or preparing something for others to see or use

Example: The CFO set out new regulations for payment processing.

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