Accounting Terms UK

As brilliant accountants and wonderful humans, we have decided to create a jargon-free, A-Z List of Accounting Terms UK. We hope it helps you, and even better, if you can't see an Accounting Term on here, pop us an email so we can help expand our list!

Bookmark our page for future reference!

A

Accountancy- The profession or duties of an Accountant 

Accountant- A person whose job it is to keep, inspect and analyse financial files

Accounting- The process or work of keeping financial accounts

Accounting Period- A period of time in which a businesses financials are being tracked

Accounts Payable- Money owed to a company by its creditors

Accounts Receivable- Money owed to a company by its debtors

Accrual- The recognition of an expense or revenue that has not yet been recorded

Arrears- Money that is overdue/unpaid

Assets- All items owned by a company that helps them run their business


B

Balance Sheet- A statement of the assets, liabilities, and capital of a business or other organisation at a particular point in time, detailing the balance of income and expenditure over the preceding period

Bank Reconciliation- Comparing business bank balance with the bank statement to spot differences

Billing- Sending of an invoice to a customer who has purchased goods/service

Bookkeeping- Activity of keeping a record/log of the financial affairs of a business

Bookkeeper- A person whose job it is to keep the records/log of the financial affairs of a business

Budget- A financial plan that shows what the business will spend it's money on over the next year, and what the business is likely to earn


C

Capital- Money belonging to the business owner

Capital Gains- A profit from the sale of property or an investment

Cash Flow- Total amount of money going in and out of a business

Closing Balance- Positive or negative amount that is left in a bank account by the end of the accounting period

Consultancy- Expert advice in a particular field

Corporation Tax- Tax levied on a companies profits


D

Debtors- Person/Business that owes money to another person/business

Deductibles- Business purchases that can be claimed as business expenses to reduce income tax

Depreciation- Reduction in value of an asset over time

Dividends- A sum of money paid regularly by a company to its shareholders out of its profits


E

Expenses- Costs that are incurred to keep the business running


F

Financial Statements- Formal records of financial activities and details of the companies financial situation

Financial Year- Starts in April, and ends in March 12 months later

Fixed Asset- Assets that cannot be easily converted into cash

Fixed Cost- A cost that does not increase or decrease


G

Gains and Losses- Refers to the money lost/gained in foreign exchanges

Gross Profit- A companies total revenue minus the cost of all expenses


H

HMRC - Her Majesty's Revenue and Customs is non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wage and the issuance of national insurance numbers.


I

Income Tax- Tax levied on a personal income

Interim Reports- Financial statements produced before the financial year has ended to give an indication of how the company is performing


J

None at the moment.


K

None at the moment.


L

Ledger- A book or other collection of financial accounts

Liability- Being legally responsible for something


M

Management Accounts- Practise of analysing and reporting on the financial data to better understand the performance of a business 

Margin- Percentage of the selling price that will be profit


N

Net Profit- Amount after deducting business expenses from gross profit


O

Opening Balance- The amount of money in a business account brought forward at the start of an accounting period

Overheads- A cost or expense


P

PAYE- 'Pay As You Earn' automatic deduction of income tax from each employees pay

Payroll- List of employees who receive a wage, salary, bonus and commissions. 

Profit- A financial gain

Profit and Loss- Financial statement that summarises the revenues, costs, and expenses incurred during a specified period


Q

None at the moment.


R

Remittance- A sum of money sent in payment or as a gift


S

Self-Assessment- Calculation of one's own taxable liability


T

Tax Liability- Total amount of tax owed by an individual, corporation, or other entity to a taxing authority like HMRC

Tax Return- A form on which a taxpayer makes an annual statement of income and personal circumstances, used by the tax authorities to assess liability for tax


U

None at the moment.


V

VAT- Value Added Tax

VAT Returns- A form a business may submit to HMRC every three months calculating how mich money a business will pay or be able to claim back in tax


W

None at the moment.


X

None at the moment.


Y

Year End- The end of the financial year


Z

Zzzzz - What Accountants do on 1st Feb!

Parker Whitwood Accountants in Manchester

We are here to help with all your business accounting and bookkeeping requirements. Established in February 2017, we deliver professional and affordable accounting and financial services to small and medium sized businesses across Manchester and the wider UK.

Regardless of whether you've been in business for 10 months or 10 years, we are more than willing to help. Our main purpose is to provide specialist accounting and bookkeeping services that will reduce your workload, help you make crucial financial choices and increase your profitability. Together we will assess your unique needs and requirements to determine the best accounting services that are suitable to you and your business.

Get in touch for a free consultation - [email protected]