Accountancy/Glossary


 * Asset
 * Anything with probable future economic benefit that is obtained or controlled by a company and is the result of a past transaction.


 * Cr
 * The abbreviation for Credit.


 * COGS
 * The abbreviation for Cost of goods sold


 * Controlling Account
 * An account in the general ledger that summarizes the account balances in a subsidiary ledger.


 * Depreciation
 * The process of spreading the cost of acquiring a fixed asset over its useful economic life.


 * Double Entry
 * is the principle of accounting which requires that every transaction has two effects one of which is a debit and the other of which is a credit of the same amount.


 * Dr
 * The abbreviation for Debit.


 * FIFO (First IN First OUT)
 * The inventory system leave new inventory in stock until the old ones sold by legal terms.


 * Fixed Asset
 * An asset acquired by a business where there was no intention to make money from immediately reselling the asset. e.g A Van used by a plumbing firm.


 * General Ledger
 * The main ledger that has all the income statement and balance sheet accounts.


 * Liability
 * Probable future sacrifice of economic benefits, or the entity owes somebody something.


 * Prepayment
 * A Prepayment is a type of asset arising from the fact that the business has alreasy been invoiced for the right to all or part of a service in a future period e.g. rent for next year, paid this year.


 * Stock
 * Stock is the set of those assets held by the business intended for resale in their current form or in a modified form. Stock includes raw materials, components, work in progress and finished goods.


 * Subsidiary Ledger
 * Subsidiary Ledger is a ledger that has individual accounts with similar characteristics.


 * UEL
 * The abbreviation for useful economic life.


 * Useful economic life (UEL)
 * The useful economic life of a fixed asset is the time period for which the asset is likely to be useful in generating profit for a company (or meeting the aims of a charity).


 * WIP
 * WIP is the abbreviation for Work in Progress


 * Work in Progress (WIP)
 * Work in progress is the set of assets held by a business which are part way through some process after which they can be resold. Once completed the articles will cease to be WIP and become finished goods.