Accounting Terminology Checklist

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Accounting Terminology Checklist  

This Accounting Terminology checklist outlines the terms, concepts and conventions that are accepted within the accounting profession.

This checklist is designed to provide 'non-financial' managers with precise definitions of accounting terms. Even though you may be familiar with some of them, it is important to know their exact meanings. For example, you may hear the terms 'revenues' and 'receipts' used interchangeably in casual office conversation. However, as far as business accounting is concerned they are different things and you will find yourself becoming confused if you don't appreciate the difference.

Even if you don't have much day-to-day involvement with financial people it is still a good idea to have an understanding of how management and financial accounts are produced and the differences between them. At the very least you should make sure that you know the basic concepts and terminology needed to understand income statements, balance sheets, and statements of cash flow as these are widely used, even by nonprofit organizations.

You should also take the time to understand exactly how and when transactions are shown in accounts and how things like stock is valued and assets depreciated over time. These things are to some extent counter-intuitive and you could find yourself misunderstanding something important if you don't know exactly how they are treated in financial reports.

A working knowledge of accounting terminology and principles becomes more important the higher you go in any organization. Even if you work in the non-profit sector it is worth taking the time to develop this knowledge, especially if you have ambitions to move up to a senior role.


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