Accounting Glossary

A simple glossary to help you understand key accounting concepts.

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Working Capital definition

Learn what working capital is and how to calculate it. Understand the working capital formula and how working capital loans help manage short-term business finances.
W

Profit and Loss Report definition

Learn what a profit and loss report is, how to read a P&L statement, and how to create one step by step. Understand revenue, expenses, and net profit to assess business performance effectively.
P

What Is Profit? Definition, Profit Margin Formula & How to Calculate Gross Profit

Learn what profit means in accounting, how to calculate profit margin, and how to determine gross profit. Understand key formulas and how they help analyze business performance.
P

Monetary vs Non-Monetary Items in Accounting: Definition & Key Differences

Learn the difference between monetary and non-monetary items in accounting. Understand how each is valued, how inflation affects them, and see examples of assets and liabilities in both categories.
M

What Are Liabilities? Definition, Examples & How to Calculate

Learn what liabilities are in accounting, how to calculate them, and the difference between current and long-term liabilities. Explore common examples and understand how liabilities affect a company’s financial health.
L

Accrual Accounting: Definition, Modified Accrual & Cash Accounting Explained

Learn what accrual accounting is, how it differs from cash accounting, and what modified accrual accounting means. Understand how accruals work to provide an accurate picture of a company’s financial position.
A

Aging in Accounting: Definition, Report & Process

Discover the meaning of Aging in accounting. Learn how aging reports categorize receivables by due date, improve collections, and protect cash flow.
A

Assets Book Value: Definition & How to Calculate

Learn what assets book value is, how to calculate book value and net book value (NBV), and understand the value of assets for financial reporting and investment analysis.
A

Company Book Value: Definition, Calculation & Comparison to Market Value

Learn what the book value of a company is, how to calculate it, and how it differs from market value. Understand total assets, liabilities, and net asset value for investors and financial analysis.
C

Depreciation Definition in Accounting & How to Calculate

Learn what depreciation is in accounting, why it matters, and how to calculate it using methods like straight-line, declining balance, and units of production. Understand how depreciation affects financial statements and asset valuation.
D

Expenses Definition In Accounting, Types & How to Record

Learn what expenses are in accounting, the different types of expense accounts, and how to record them. Discover why tracking business costs is essential for accurate financial reporting and profitability.
E

What is Gross Margin? Definition and How to Calculate

Gross Margin definition in accounting. Learn the formula for gross margin, see a calculation example, and understand why gross margin is key to profitability.
G

Journal Definition & How to Make Accounting Journal Entries

Learn what a journal is in accounting, what a journal entry includes, and why accounting journal entries matter.
J

Cash Accounting: Definition and Current Scene

In accounting, cash accounting is a process in which the transaction is only recorded once its fulfilled. Learn more about its definition.
C

What is Capital? Definition, and Types

In accounting, capital refers to your financial resources. Learn the types of capital, from equity to working capital, and examples.
C

Cost of Goods Sold: Definition and Calculation

Cost of Goods Sold (COGS) is your direct cost during acquisition or production. Learn how to calculate it, what costs are included, and why it’s essential for business profitability.
C

Debit and Credit: Definition and Importance

Learn how debits and credits form the foundation of double-entry accounting and how software like Eleven can help manage them for efficient, error-free bookkeeping.
D

What Is Equity? Definition, How to Calculate It & How to Manage It With Software

In accounting, equity is what the owner or shareholders of a busisness own after all debts are paid. Learn more about types of equity and its management with software.
E

Unrealised Gains and Losses: Definition & Examples

Unrealised gains and losses are mounts and transactions that haven't been settled yet. Learn how they work with practical examples.
U

Double Entry: Definition & Examples

Double entry accounting are transactions that are recorded in 2 different accounts. Find out how they are applied in real-life scenarios.
D
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