A representation of money, resources, transactions, claims to resources and changes in resources in words or other units of measurement. 

E.g. Account Receivable: represents resources (money) you have a claim to against a debtor

Account Payable 

Amount of money you owe a creditor.

Account Receivable

Amount of money due from customers or debtors


Recording and reporting of financial transactions including origin of transaction, treatment and summarization in the financial statements


Recognizing a revenue or expense  when a transaction has occurred but the money has not yet been earned or paid.

Accrued Expense

An expense that has occurred but has not yet been realized

Accrued Payroll Taxes

Payroll taxes that have occurred but not yet been recognized in the accounts


A systematic reduction in value over a period of time of intangible assets such as licenses. Cf Depreciation


Increase in value of an asset.


Anything of value to which a company has legal claim that is expected to be of economic benefit in the future. It can be tangible or intangible

E.g. Land:  Is an asset because of possible appreciation in value as well as providing a location to carry out economic activities.

Bad Debt

A loan or account receivable whose entire or partial amount is considered uncollectable.

Balance Sheet

A financial statement that describes the financial position / financial condition of a company as at a specific point in time. It presents assets, liabilities and equity.


An institution engaged in the business of deposit taking, protecting money for others and making loans. It may also be engaged in other services such as a wealth management and foreign currency exchange.


This includes all the transaction taking place with a bank 

Bank charges

The fees paid to the bank for services provided


The process of recording financial transactions and keeping financial records 

Book Value

Amount of an asset reflects on the balance sheet usually after depreciation that denotes that “current value of the asset of considering wear and tear. Also known as carrying value.

Business Loans

Loans issued to businesses specifically intended for business purposes. Usually fall into two categories Working capital and fixed asset loans


Cash or liquid assets held for expenditures. Also money used to start a business.

Capital Expenditure

Outlay of money used for acquiring or improving fixed assets.


Amount of money held in physical cash (Petty cash), a bank account (current or saving), mobile money balances and any liquid current assets that can be converted to cash easily.

Cash Flow

This is the net inflow or outflow of cash in a certain period relating to a particular activity

Cash Flow Statement 

A financial statement that presents information on all net cash inflows or outflows a company experiences due to financing activities, Investing activities and operating activities in a certain period.

Cost of Sales

Cost of buying inventory, raw materials and producing goods.

Closing Inventory

This is the amount of inventory held at the end of a specific period


A party that loans money or other asset to a debtor

Current Account

This is a deposit account held at a financial institution that allows withdrawals and deposits on demand.

Current Asset

An asset that can be converted to cash within a year.

Current Liability

A liability that will come due within a year.


A party owing money or assets to a creditor


This is an expense allowance made for wear and tear on a fixed asset over its useful life. Also, a systematic reduction in value of a tangible asset over its useful life. Cf Amortization


An amount of money spent on a specific item or transaction. 


This is the amount of a business’ total assets less its total liabilities.

Financial Statement

A presentation of financial data relating to the company’s financial condition, profitability and cash flow at specific points in time or over certain periods of time.

Financing Activities

These are activities / transactions relating to how a company raises capital and pays it back.

E.g. selling shares

Fixed assets

These are tangible long term assets used in the operation of business.

E.g. Buildings and vehicles

Fixed Costs

Costs that remain constant within a specific range of activities

Fixtures and Fittings

Attachments and additions to buildings.

E.g. bathroom installations and furniture.

Gain on sale of assets

Excess revenues received over the cost of the asset upon sale of the asset

Gross Profit

The difference between Total Sales and Cost of Sales


Any inflow of revenue to a company during a period of time.

Income Tax

An umbrella term describing P.A.Y.E. Tax, Withholding Tax and VAT 


Payment for use of borrowed money.

Interest Expense

Interest paid in a specific period


Tangible property held for sale. Stock. 


Putting money into something that will earn you an interest or appreciate in value or make a profit

Investing Activities

These are activities / transactions relating to investing.

E.g. Buying fixed assets


Debts or obligations owed to a creditor.


Easily convertible to cash


When there is an excess of expenses over revenue for a certain period.

Loss on disposal of asset

The Loss incurred when selling an asset at an amount less than Book value of that asset


An excess of selling price of cost of purchase or manufacture


The figure remaining after all relevant deductions have been made.

Net Income

Excess or deficit or revenues and gains after expenses and losses are deducted for a specific period.

Operating Activities

These are activities / transactions relating to ongoing regular business activities.

E.g. selling goods


A list of company employees and the money they are to be paid.

Payroll Taxes

P.A.Y.E. taxes for employees that must be paid to the government.

Petty Cash

A small amount of cash kept at hand to pay for minor office expenses


Positive Net Income. Excess of income that remains after deducting expenses from revenues

Profit and Loss Statement 

A financial Statement that summaries the effects of revenues and expenses over a period of time


Conversion into cash


Money earned from sale of products or delivery of services


Exchange of goods or services for money


A unit of ownership in a company.

Useful Life

Estimated time of usability of an asset

Utility Expense

Costs incurred by using utilities such as electricity, water and heating


How much money something is worth


A consumer tax charged on taxable goods, services and imports

Working Capital

This is capital used in the day-to-day running of a business. Also an excess of current assets over current liabilities