Absorption: the sharing out of the costs of a cost center amongst the products which use the cost center.
Account: a record in a double entry system that is kept for each (or each class) of asset, liability, revenue and expense.
Accounting equation: an expression of the equivalence, in total, of assets = liabilities + equity.
Accounting period: that time period, typically one year, to which financial statements are related.
Accounting policies: the specific accounting bases selected and followed by a business enterprise (e.g. straight line or reducing balance depreciation).
Accounting rate of return: a ratio sometimes used in investment appraisal but based on profits not cash flows.
Accounting standards: Prescribed methods of accounting by the accounting standards or financial reporting standards regulation body in your jurisdiction.
Accruals: (that which has accrued, accumulated, grown) expenses which have been consumed or enjoyed but which have not been paid for at the accounting date.
Accruals convention: the convention that revenues and costs are matched with one the other and dealt with in the Profit and Loss (P&L) Account of the period to which they relate irrespective of the period of receipt or payment.
Accumulated depreciation: that part of the original cost of a fixed asset which has been regarded as a depreciation expense in successive Profit and Loss (P&L) Accounts: cost less accumulated depreciation = net book value.
Acid test: The ratio of current assets (excluding stock) to current liabilities.
Acquisitions: operations of a reporting entity that are acquired in a period. Separate disclosure of turnover, profits, etc must be made.
Activity based costing: cost attribution to cost units on the basis of benefit received Irons indirect activities. The idea is that overhead costs are driven by activities (e.g. setting up a machine) not