Unit 4: Vocabulary

The method, of accounting, in which income and expenditure, are recorded at the date they are earned.

From the accounting point of view, it doesn't matter when you actually receive the payment as I am using accrual basis accounting so I have already accounted for the invoice.

In agreement with, in accordance with.

Whichever method you use when accounting for tax, it is important to be consistent with the regulations in that method.

The method of allocating the cost of an asset over its useful life.

The depreciation of the new machine will happen over 12 years.

Show the full cost of something in the company.

I don't expect that the new van will be worth anything after 12 months, so I decided to expense it in the accounts this year.

An asset which is not consumed or sold during the normal course of business activities.

The auditors checked through the list of fixed assets and made sure that all the machinery, vehicles and property listed really existed.

The common set of standards and procedures used by companies when preparing financial statements.

All accountants should have a firm understanding of GAAP, and follow the principles closely.

Impose or collect.

The government levies a higher tax on luxury goods, than on basic products.

A company's total revenue minus the operating expenses, depreciation, and interest paid and taxes.

When the board reviewed the previous year's accounts they were pleased to see that the net earnings had increased.

Exclude, leave out.

When the company was audited, it was noticed that $12,000 of income had been omitted from the tax return.

A firm which is permitted to sell shares in the firm to the general public.

After the merger Questcore became a public company and the value of their shares has increased by over 30%.

A method which imposes a set rate of depreciation on the remaining balance of the asset.

The new premises cost $100,000 but as we will be using reducing balance depreciation over 5 years, the first year will cost us the most.

The amount of money a company receives over a given time frame.

Due to the Christmas season, revenues in shops are usually higher in the last quarter of the year than in the first.

Having, or expressing, meaning or importance.

As a potential investor the most significant figures for me are the total profit and the liabilities.

Methods of accounting which focus on tax instead of the appearance of public financial statements.

Tax accounting provides a simpler method of calculating your tax liability.

The amount of money on which tax is paid.

Tax revenues fall when workers lose their jobs, and the taxable income that goes with them.