The Ultimate Guide to Accounting Jargon For Business Owners (Part 2)Jun 17, 2022
Hi business owners!
Last week you have received the translations of 6 accounting jargon into simple English which are: trade, Accounts Receivable, Accounts Payable, Journal, Payment Voucher and Closing. If you would like to review it or bookmark it, click here to go to part 1.
Now let’s continue on the momentum with part 2 of the popular accounting jargon that every business owners should know series. Today we’ll be translating another 6 accounting jargon for you which is Depreciation, Accrual, P&L, General Ledger, Receivables Ledger and Payables Ledger.
Do I sound like I’m talking alien language to you? If it is, don’t worry! The translations for these accounting jargon are right here for you!
7. Depreciation, Fixed Assets Depreciation
Depreciation is also known as Fixed Assets Depreciation as it is commonly used for Fixed Assets.
When your business purchase a fixed asset, the cost of the asset is recorded into your fixed assets account instead of the expense account. The cost of the asset will be gradually moved to the relevant expense account throughout the lifespan of the asset. As this movement is reducing the value of your asset, it is called depreciation.
8. Accrual, Accrued Expenses
Accrual is also known as Accrued Expenses. Accrual is recording an expense that has incurred but you have not receive the bill yet. Accrual is also used to record payroll expenses that will be paid to your employees on a later date.
9. P&L, P&L Report, Profit and Loss Report, Income Statement, Statement of Comprehensive Income
I guess you have heard other business owners or your accountant mentioned P&L all the time. The famous P&L is the abbreviation of Profit and Loss report. This report is also known as Income Statement or Statement of Comprehensive Income.
P&L report is the favourite financial report among business owners. This is because you can see the performance of your business such as the total amount of your sales, expenses and the nett profit or loss from this report. Has P&L become your favourite report too? It’s definitely in my favourite list!
10. GL, General Ledger, Ledger
General Ledger is also known as Ledger or GL (the abbreviation of General Ledger).
General ledger is a report that contains all your accounting transactions grouped by the account name. If you’re wondering why your expenses are high, this is the report that contains the answer.
11. Receivables Ledger
Receivables Ledger is a report that contains all your accounting transactions in Accounts Receivable grouped by the customer name. From this report, you will find all the invoices, credit notes and receipts for each of your customer.
12. Payables Ledger
Payables Ledger is a report that contains all your accounting transactions in Accounts Payable grouped by the supplier name. From this report, you will find all the bills, credit notes and payments for each of your supplier.
Accounting jargon are pretty easy to understand, right? Now let’s recap!
The accounting jargon that you have learned in part 1 is trade, Accounts Receivable, Accounts Payable, Journal, Payment Voucher and Closing. If you would like to review it or bookmark it, click here to go to part 1.
The accounting jargon that you have learned today in part 2 is Depreciation, Accrual, P&L, General Ledger, Receivables Ledger and Payables Ledger.
The next time these accounting jargon pops up, you will understand it immediately. However, if you forgot what it means, don’t worry! You can bookmark this page so you can easily come back to get it translated for you.
So which accounting jargon did you find easy to remember?
Drop me an email or message us on Instagram, Facebook or YouTube and let me know!
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