Accounting Glossary

The part of accounting that involves recording economic transactions and events, either electronically or manually; also called record keeping.
Bookkeeping
The process of developing formal plans for future activities, which often serve as a basis for evaluating actual performance.
Budgeting
The federal agency that has the duty of collecting federal taxes and otherwise enforcing tax laws.
CCRA
An accountant who has met the examination, education, and experience requirements of the Society of Management Accountants for an individual professionally competent in all areas of accounting and specializing in management accounting.
Certified Management Accountant
The name for a corporation's shares when only one class of share capital is issued; also called capital stock.
Common share capital
The chief accounting officer of an organization.
Controller
The cost incurred to earn sales (or revenues).
Expenses
The area of accounting aimed at serving external users.
Financial accounting
The means organizations use to pay for resources like land, building, and machines.
Financing activities
Work for local, provincial and federal government agencies.
Government accountants
The area of accounting aimed at serving the decision-making needs of internal users.
Managerial accounting
The amount a business earns after subtracting all expenses necessary for its sales; also called profits or earnings.
Net income
The amounts earned from selling products or services; also called sales.
Revenues
The amounts earned from selling products or services; also called revenues.
Sales
The owners of a corporation; also called stockholders.
Shareholders
The field of accounting that includes preparing tax returns and planning future transactions to minimize the amount of tax; involves private, public, and government accountants.
Tax accounting
Accounting:
An information system that identifies, measures, records and communicates relevant, reliable, and comparable information about an organization's economic activities.
Audit:
A check of an organization's accounting systems and records.
Bookkeeping:
The part of accounting that involves recording economic transactions and events, either electronically or manually; also called record keeping.
Budgeting:
The process of developing formal plans for future activities, which often serve as a basis for evaluating actual performance.
Business:

One or more individuals selling products or services for profit.
Business entity principle:
The principle that requires every business to be accounted for separately from its owner or owners; based on the goal of providing relevant information about each business to users.

CA (Chartered Accountant):
An accountant who has met the examination, education and experience requirements of the Institute of Chartered Accountants for an individual professionally competent in accounting.

CCRA (Canada Customs and Revenue Agency):
The federal government agency responsible for the collection of tax and enforcement of tax laws.

CGA (Certified General Accountant):
An accountant who has met the examination, education and experience requirements of the Certified General Accountants' Association for an individual professionally competent in accounting.

CMA (Certified Management Accountant):
An accountant who has met the examination, education and experience requirements of the Society of Management Accountants for an individual professionally competent in accounting.

Common share:
The name for a corporation's shares when only one class of share capital is issued.
Controller:
The chief accounting officer of an organization.
Corporation:
A business that is a separate legal entity under provincial or federal laws with owners that are called shareholders.

Cost accounting:
A managerial accounting activity designed to help managers identify, measure and control operating costs.

E-business:
Conducting business online; commonly sales transactions and/or marketing.

Earnings:
The amount a business earns after subtracting all expenses necessary to create revenues; also called net income or profit.

Ethics:
Beliefs that separate right from wrong.

Expenses:
The costs incurred to earn revenues (or sales). Outflows or the using up of assets as a result of the major or central operations of a business; also, liabilities may be increased.

External auditors/ing:
Examine and provide assurance that financial statements are prepared according to generally accepted accounting principles (GAAP).

External users:
Persons using accounting information who are not directly involved in the running of the organization; examples include shareholders, customers, regulators, and suppliers.

Financial accounting:
The area of accounting aimed at serving external users.

GAAP (Generally accepted accounting principles):
The rules adopted by the accounting profession that make up acceptable accounting practices for the preparation of financial statements.

General accounting:
The task of recording transactions, processing data, and preparing reports for managers; includes preparing financial statements for disclosure to external users.

Government accountants:
Work for local, provincial and federal government agencies.

Internal auditors/ing:
Employees within organizations who assess whether managers are following established operating procedures and evaluate the efficiency of operating procedures.

Internal controls:
Procedures set up to protect assets, ensure reliable accounting reports, promote efficiency, and encourage adherence to company policies.

Internal users:
Persons using accounting information who are directly involved in managing and operating an organization; examples include managers and officers.

Limited liability:
The owner's liability is limited to their investment in the business.

Limited liability partnership:
Restricts partners' liabilities to their own acts and the acts of individuals under their control. (Chapter 1) A partnership in which each partner is not personally liable for malpractice or negligence claims unless the partner was responsible for providing the service that resulted in the claim. (Chapter 14)

Limited partnership:
Includes both general partner(s) with unlimited liability and a limited partner(s) with liability restricted to the amount invested.

Management consulting:
Activity in which suggestions are offered for improving a company's procedures; the suggestions may concern new accounting and internal control systems, new computer systems, budgeting, and employee benefit plans.

Managerial accounting:
The area of accounting aimed at serving the decision-making needs of internal users. (Chapter 1) The collecting, managing, and processing of financial and nonfinancial information for use by managers and other internal decision makers of an organization. (Chapter 21, p. 1074)

Net income:
The amount a business earns after subtracting all expenses incurred to generate revenues; also called profit or earnings.

Net loss:
Arises when total expenses are more than revenues (sales). The excess of expenses over revenues for a period.

Partnership:
An unincorporated association of two or more persons to pursue a business for profit as co-owners.

Private accountants:
Accountants who work for a single employer other than the government or a public accounting firm.

Profit:
The amount a business earns after subtracting all expenses incurred to generate revenues; also called net income or earnings.

Public accountants:
Accountants who provide their services to many different clients.

Recordkeeping:
The recording of financial transactions and events, either manually or electronically; also called bookkeeping.

Revenues:
The amounts earned from selling products or services; also called sales. Inflows of assets received in exchange for goods or services provided to customers as part of the major or primary operations of the business; may occur as inflows of assets or decreases in liabilities.

Sales:
The amounts earned from selling products or services; also called revenues.

Shareholders:
The owners of a corporation.

Shares:
A unit of ownership in a corporation.

Single proprietorship:
A business owned by one individual that is not organized as a corporation; also called a sole proprietorship.

Social responsibility:
Involves considering the impact and being accountable for the effects that actions might have on society.

Sole proprietorship:
A business owned by one person that is not organized as a corporation; also called single proprietorship.

Tax accounting:
The field of accounting that includes preparing tax returns and planning future transactions to minimize the amount of tax; involves private, public, and government accountants.

Unlimited liability:
When the debts of a sole proprietorship or partnership are greater than its resources, the owner(s) is financially responsible.