Glossary Of Terms

Accounting

Recording of an entity’s transactions using accounting methods and procedures.

Accounting convention

Common practice universally followed in recording and presenting information – helps to compare data across units.

Accounts payable

Money that is owed (buying goods on account or on credit).

Accounts receivable

Money that should be collected from customers who bought on credit.

Assets

Economic resources that are expected to produce economic benefits for their owners such as buildings, vehicles or machinery.

Bad debts

When customers never pay what they owe.

Balance Sheet

Statement of an entity’s position at a given date: assets = liabilities + equity.

Budget

A short term financial plan.

Cash equivalents

Not cash, but can be converted into cash easily.

Cash Flow Statement

A statement showing sources and uses of funds and that explains the changes in cash and cash equivalents over the period of accounts.

Creditor

Someone to whom money is owed.

Debtor

Someone who owes us money.

Depreciation

A loss of value / The process of allocating the original purchase price of a fixed asset over the course of its useful life.

Director

People appointed by the shareholders to manage the company.

Equity

Difference between the rand value, total assets and liabilities.

Expense

Decreases equity other relating distributions to participants.

Elements

Assets, liabilities, income, expenses and equity.

Estimate

Calculated guess based on forecasts.

Forecasting

Making predictions for the future.

Freely transferable

When the general public is able to buy and sell their shares.

Income

Increases equity other relating contributions from participants.

Income Statement

A record of an entity’s income and expenses for a specified period of time.

Interest

Percentage accumulated on monies invested or monies owed.

Liabilities

Present obligations resulting past settlement resulting outflows.

Post

The process of transferring information to a ledger.

Prepaid expense

A portion of an expense has been paid off.

Ratio

Measures the relationship between two measurable items by dividing one item by another item.

Retained earnings

A portion of the profit is not drawn out by the owner.

Return

The owners earning a good return on investment in the business.

Shares

A unit of ownership in a company.

Shareholder/Stockholder

Individual who owns the shares.

Tax

Monies that are payable as a portion of income as per a country’s legislation.

Unbiased

Serving accounting principles alone and not one’s own interest.

Wages

Calculated by adding normal time and overtime.

STATISTICAL TERMS (PART 3)

Data

Numerical information contained in a population.

Experiment

Any process of observations or measurement.

Population

A complete data collection of elements sharing a specified characteristic of interest, the properties of which are to be analysed.

Parameter

A numerical characteristic of a population.

Sample

A portion/part of the total population.

Statistic

A numerical characteristic of a sample.

Census

A study of an entire population.

Elements

The entities or objects about which information is collected.

Variable

A characteristic of interest about the element, i.e., the topic about which data are collected.

Quantitative data

Measurements that are expressed numerically, where the number has meaning on a number line.

Qualitative data

Information that is non-numerical, like marital status, type of job, gender, etc. It is sometimes coded to appear quantitative but will have no meaning on a number line.