Your company’s accounts payables are amounts it owes to suppliers and other creditors, for example, items or services purchased and invoiced for. It does not include payroll.
Accounts receivable are the funds that customers owe your company for products or services that have been invoiced.
An accounting period is any time frame used for financial reporting of transactions that fall within a given date range. An accounting period is usually 12 months. There may be different accounting periods for various business tasks.
An accounting term that refers to the recognition of revenue or expenses before payment is received or made.
Anything of value that a company owns, including cash, investments, property, and equipment.
An independent examination of a company's financial records to ensure they are accurate and comply with accounting standards.
A financial statement that provides a snapshot of a company's assets, liabilities, and equity at a specific point in time.
Interest is the cost of borrowing money and it is charged as a percentage, it amounts to a fee that the borrower pays to the lender for the money loaned. It is usually paid within an agreed repayment plan.
A tax on the profits of limited companies and some other types of business in the UK.
Cost of goods sold (COGS) is the direct cost of making your company's products. It can tell you a lot about your financial performance, efficiency and profitability.
An accounting term that refers to the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors.
A system of bookkeeping where every transaction is recorded in two different accounts, one as a debit and one as a credit, to ensure the accuracy of the financial records.
The is the stake or share in assets of a company after deducting its liabilities.
Expenses are costs that businesses incur in running their services and operations. Expenses include wages, salaries, maintenance, rent, and depreciation. Expenses are deducted from revenue to arrive at profits.
In double-entry accounting, general ledgers are forms used for the two accounts on separate sheets, in a book or binder and are called the general ledger. This is considered to be a permanent, classified record for each business account.
A financial statement to summarise the amounts of revenues earned, and the expenses incurred by a business over a period of time. It is used to measure a business’s financial performance.
Inventory is a list of goods and materials. It is considered an asset and refers to goods held in stock by a business. Inventory is one of the most important assets that a business possesses because they are ready or will be ready to be sold.
Journals are used to record financial transactions made by a business. Whether the transactions are credits or debits, they should be input into a journal at the time and date which they occur. These recordings can then be used for future reference and reconciling and can be transferred to other official records such as the general ledger. All journal entries should include the transaction date, type, and amount.
A book or computer file that contains a record of all financial transactions for a particular account or accounts.
A company's obligations or debts, including loans, mortgages, and accounts payable.
PAYE is short for Pay As You Earn. It's not a tax, it's a system that HMRC use to collect income tax and national insurance. The PAYE system is used to collect tax from certain sources of income, such as wages, and private pensions.
Payroll is the system of paying expenses related to staff salaries. It also includes calculation of national insurance, pension contributions, PAYE and employer's tax liability, as well as generating payslips, P60's, P45's and filing real time reports to HMRC.
A financial statement that shows a company's revenue, expenses, and profit over a specific period of time.
"Real Time Information" is an online payroll submission by employers and pension providers using authorised payroll software to tell HMRC about PAYE payments at the time they are made.
Revenue is he total amount of income received from the sale of goods or services related to the company's primary operations. It's also known as gross sales and is the first line of an income statement.
Trial balances are used to prepare balance sheets and other financial statements and are an important document for auditors. A trial balance is completed to check that the debit and credit column totals of the general ledger accounts match each other, which helps spot any differences or errors.
A tax on goods and services that is added to the price of the product and collected by the seller.