Jargon Buster

• Asset – Anything owned by an individual or a business that has commercial or exchange value.
• Audit – An official inspection of the accounting records and procedures of a business, government unit, or other reporting entity by a trained and qualified accountant.
• Balance sheet – A financial statement listing  the company’s assets, liabilities and equity on a specific date.
• Bookkeeping – the recording of business transactions.
• Break-even analysis – an analysis method used to determine the products or services that need to be sold to reach a break-even point in a business where revenue matches cost.
• Capital expenditure – Funds spent during a particular period to acquire or improve long-term assets such as property, plant or equipment.
• Cost accounting – The process of identifying and evaluating costs, frequently used as a managerial accounting activity to facilitate internal decision making.
• Financial accounting – The area of accounting concerned with reporting financial information to interested external parties/organisations.
• Financial analysis – The techniques used by accountants or financial analysts to determine the financial / monetary needs of a business.
• Fixed cost – cost that does not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense.
• Internal audit – an independent appraisal function established within an organisation to examine and evaluate its activities as a service to the organisation.
• Overheads – the costs associated with providing and maintaining a manufacturing or working environment.
• Trial balance – a listing of the accounts in your general ledger and their balances as at a specified date.
• Variance analysis – the process of examining in detail each variance between actual and budgeted/expected/standard costs to determine the reasons why budgeted results were not met (eg, sales prices being too low).
• Year-end – The end of the financial year.
• Zero-based budget – where the expenses or costs of the prior year are not taken into consideration when establishing expense or budgetary levels looking forward.

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