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A
accountanta qualified person who is skilled at managing and analysing business financial records.
accounta record of a business transaction. When you buy something on credit, the company you are dealing with sets up an "account". This means it sets up a record of what you buy and what you pay. You will do the same thing with any customers to whom you extend credit.
account payee onlywords often written on crossed cheques, which direct the bank to pay the cheque only to the bank account of the payee.
accounts payableis money you owe to suppliers and other business creditors as a result of purchases of stock and other expenses such as overheads and taxes.
accounts receivablea record of what is owed to you. All of the credit "accounts" - the record of what each customer owes you - taken together are your "accounts receivable".
acquisitionsin relation to the GST, acquisitions include the things you buy (goods, services and anything else) for your business. They also include many other transactions, such as obtaining advice or information, taking out a lease of business premises or hiring business equipment.
actuarya mathematician whose work is mainly concerned with insurance and finance.
ad valoremaccording to value. Applied to customs duty, it means a percentage charge on the value, rather than the weight or quantity of goods.
affidavita declaration in writing on oath, made before a person legally qualified for the purpose.
amortisethe gradual process of writing off the cost of an asset, or paying off a liability by means of a sinking fund, over a period of time.
articles of associationthe basic document of a registered company defining its internal organisation. It is one of two fundamental documents on which the registration of a company is based. See memorandum of association.
assetanything of worth that is owned. The assets of a business are money in the bank, accounts receivable, securities held in the name of the business, property or buildings, equipment, fixtures, merchandise for sale or being made, supplies and all things of value that the business owns.
auditdetailed checking of the financial records of a business by an independent qualified person (auditor) in order to verify their correctness or to detect errors or fraud.
Australian Business Number (ABN)an identifier for dealings with the Australian Taxation Office and for future dealings with other government departments and agencies.
authorised capitalthe total amount of capital which a company, by its memorandum of association, is authorised to offer for subscription. See also, paid up capital.
awardan agreement having the force of law, which sets out working conditions and wages for certain types of employment.
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B
bad debtsmoney owed to you that you can't collect
balancethe amount of money remaining in an account. The total of your money in the bank after accounting for all transactions (deposits and withdrawals) is called a "balance".
balance sheetan important business document that shows what a business owns and owes as of the date shown. Essentially a "balance sheet" is a list of business assets and their cost on one side and a list of liabilities and owners' equity (investment in the business) on the other side with the amount for each. The liabilities include all that the business owes.
bank drafta written instruction to a bank’s agent to pay a sum of money to the person specified on the draft. A safe and convenient way of remitting money overseas.
bank reconciliationa comparison between the bank’s record of transactions and the record of the firm’s cash book. After taking into account such items as unpresented cheques and bank charges etc., the two records should show an identical balance.
bankrupta debtor, who has volunteered or been forced to appear before a Bankruptcy Court and has been judged insolvent, because s/he has insufficient assets to meet the demands of all creditors.
bill of salea document under seal, which formally transfers ownership of property specified in the document from the borrower to the lender, until such time as the debt has been paid in full.
bona fidein good faith, honestly, without fraud, collusion or participation in wrong doing.
bondpayment by a tenant to a landlord before the tenant takes over the premises and from which the landlord may be able to deduct arrears of rent or the cost of rectifying damage.
bookkeepingthe process of recording business transactions in the accounting records
break-even pointthe point at which volume of sales is enough to cover all costs.
bridging loana loan to provide short-term finance, usually to buy property or land, where the loan is to be cleared by longer-term borrowing, or the sale of assets.
budgetan estimate of expenses and revenue required.
Business Activity Statementa single form used to report business tax entitlements and obligations, including the amount of GST payable and your input tax credits.
business namethe name of a business officially listed in the state or territory Register of Business Names.
C
capitalthe total owned and borrowed funds in a business.
capital gaina financial gain made from selling fixed assets such as land, buildings, or a business at a price above the original purchase price.
capital requirementa list of expenses that must be met to establish a business. Even before a business is started, the owner should start keeping records.
cashincludes all money in the bank, in the cash drawer and in petty cash. Banknotes, coins, bills and negotiable securities (like cheques) is cash. But so is the money you can draw on demand - your bank accounts or savings accounts also represent "cash".
cash booka record of cash payments and receipts, showing these under various categories.
cash discounta deduction that is given for prompt payment of a bill.
cash flowthe flow of internal funds generated within the business as a result of receipts from debtors, payments to creditors, drawings and cash sales.
cash receiptsthe money received by a business from customers
caveat emptorlet the buyer beware. The condition of sale is that the purchase is at the buyer’s risk.
collateralsecurity provided by a borrower to cover the possibility that the loan will not be repaid.
companya business owned by a group of people called shareholders, which has its own legal identity separate from its owners.
consumer price index (CPI)a measure of the aggregate rise or fall in prices of commonly used goods and services, published by the Commonwealth Government as a basis, among other things, for deciding what overall increases should be made to wages and salaries.
contingent liabilitya liability which will only arise upon the happening of a certain event, for example, the guarantor of a loan being asked to honour the guarantee if the borrower defaults.
contracta legally binding agreement between two or more parties.
controllable expensesthose expenses that can be controlled or restrained by the businessperson.
copyrighta type of property right which protects the expression of ideas such as literary or dramatic works, television productions, drawings etc., from being used for commercial gain without permission of the copyright owner. Registration is not a prerequisite for protection.
co-signerspeople whom together share responsibility on behalf of a business by jointly signing documents or cheques.
cost of goods soldthe total cost to the business of the goods sold during an accounting period. In its simplest form this is the sum of the opening stock plus all purchases less the closing stock.
cover notea temporary certificate of insurance issued by an insurance company to give immediate insurance cover until a formal document is prepared and issued.
creditan entry made on the right hand side of an account and indicating a gain to a liability, owner’s equity or revenue account.
credit applicationa form to be completed by an applicant for a credit account, giving sufficient details to allow the seller to establish the applicant’s creditworthiness.
credit controlany policy designed to increase or decrease credit.
credit limitthe upper limit of credit that a business will allow a customer to have.
creditora person or business to whom money is owed.
crossed chequea cheque across which two parallel lines have been drawn. The effect of crossing a cheque is to direct your bank to pay the cheque only through another bank account.
current assetsincludes cash, short-term deposits, customers’ accounts, stock (includes work in progress, raw materials and finished goods), that will be converted into cash during the normal course of business, within a year.
current liabilitiesshort-term debts such as bank overdraft, creditors and provisions set aside to pay taxation and other commitments (for example, holiday or long service leave) and expected to come due within one year of the Balance Sheet.
D
debenturea fixed interest investment in a company, which has priority for interest payments, generally redeemable after the lapse of a specified time
debitTo debit is to place an entry on the left-hand side of an account. A debit in a liability account makes it smaller. A debit in an asset account makes it larger.
debtthat which is owed. If you borrow money, buy something on credit or receive more money on an account than is owed, you have a "debt.
debt capitalmoney from external sources used to finance a business. See also equity capital.
debtora person or business who owes money
defaultto fail to meet an obligation when due, such as paying a debt.
demandan order to comply with an obligation. In business, paying on "demand" means that the obligation must be satisfied immediately when requested.
depreciation expensegradual reduction of the value of a fixed asset and gradual application of this cost to the expenses of a business over the useful life of the asset.
depreciation schedulea table showing depreciable assets, the year each wa