Glossary

Absorption costing: A method of calculating the cost of manufacturing a product or providing a service.

Account: A section in a ledger devoted to a single aspect of a business (e.g. a bank account, wages account, office expenses account).

Accounting: The recording, collating and communication of business data, usually of a monetary nature.

Accounting cycle: This covers everything from opening the books at the start of the year to closing them at the end. In other words, everything you need to do in one accounting year, accounting wise.

Accounting equation: The formula used to prepare a balance sheet: assets 5 liabilities 1 equity.

Accounts payable: An account in the nominal ledger which contains the overall balance of the purchase ledger. ...

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