CWC (Certified working capital) – A certification issued by a financial institution to certify that a company has sufficient working capital to meet its current obligations. CORP (Corporation) – A type of business organization created when a group of individuals comes together to form a company. CECL (Current expected credit loss) – A new accounting standard that requires banks to estimate the lifetime losses on all of their loans.
BS/B/S- Balance Sheet
Additionally, John also adjusting entries agrees to pay Michelle a 15% interest rate every 2 months. P&M cost for most all cases includes all the materials that leave with the vehicle, as well as some items consumed or used during the repair. The car has parts, paint, primer, clear, etc., that upon delivery now belongs to the vehicle owner. Ideally, you’ll also want to get some sense of how the business you’re evaluating plans to preserve or improve that performance over the long haul. The net sales figure excludes any sales that were negated through refund or return.
- Commonly known as BOLI – this exclusive life insurance policy purchased by banks where they function as both beneficiary & policy owner offers them a tax-efficient way to offset benefit costs.
- The practice of stamping no protest or NP on a dishonored negotiable instrument began with Thomas A. Scott.
- Essentially, they’re accounting entries on a balance sheet that show a company owes money to its financiers.
- It is closely tied to a company’s procurement function and operational efficiency.
- This person has met additional state-specific education and experience requirements to become licensed and certified to practice public accounting.
Basic Accountancy Terms: Abbreviations, Acronyms & Their Definitions
When the supplier delivers the goods it also issues a sales invoice stating the amount and the credit terms such as Due in 30 days. After matching the supplier’s invoice with its purchase order and receiving records, the company will record the amount owed in Accounts Payable. Return to this handy guide whenever you stumble upon unfamiliar financial terms.
- This accounting abbreviation refers to profit calculated by subtracting all of the expenses from revenues for a given period.
- This will include the interest rates, maturity dates, collateral pledged, limitations imposed by the creditor, etc.
- Annual General Meeting (AGM) is a yearly gathering of shareholders to discuss and vote on corporate affairs, including financial reports.
- Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
- It appears on a company’s income statement and can be calculated by subtracting the cost of goods sold from revenue.
ALLL – Allowance for Loan and Lease Losses
Auditing or ADT is a systematic examination and verification of the company’s accounts or financial system by an independent professional(often a Liability Accounts CPA). In the ever-evolving world of finance and business, you might often find yourself buried under a heap of paperwork full of terms that sound like a foreign language. For example, such a comparison might reveal that one company is more efficient at managing expenses and has better growth potential than the other. Knowing how to “talk the talk” will allow you to focus less on accounting definitions and more on the important training you’ll need to launch a successful accounting career. Bond refers to a form of debt investment that is considered fixed-income security. An account that is treated as a saving vehicle for retirement and allows individuals chances for investment through pre-tax money.
EP – Equity Partner
This refers to the partially completed goods or services that are in the production process and have not yet been n/p meaning in accounting sold. WIP represents the costs that have been incurred for products or services that have not yet been completed and transferred to finished goods or services. A temporary difference between the tax basis of an asset or liability and its financial reporting basis, resulting in a potential future tax expense. In this piece, we share 50 of the most common accounting abbreviations you should know.