Accounting Glossary
Plain-language definitions for every accounting and finance term you encounter. Searchable, linkable, and always up to date.
50 terms covering Australian tax, compliance, bookkeeping, and financial reporting. Written by accountants for business owners.
A
Australian Business Number.
Money a business owes to its suppliers for goods or services received but not yet paid for.
Money owed to a business by its customers for goods or services delivered but not yet collected.
An accounting method that records revenue when earned and expenses when incurred, regardless of when cash changes hands.
A resource owned by a business that has economic value.
B
A financial statement showing a business's assets, liabilities, and equity at a specific point in time.
Business Activity Statement.
The process of comparing a business's internal financial records with its bank statement to identify and resolve discrepancies.
A registered tax practitioner authorised by the Tax Practitioners Board to provide BAS services for a fee.
C
A tax on the profit made from selling an asset that has increased in value.
An accounting method that records revenue when cash is received and expenses when cash is paid.
The movement of money into and out of a business over a period.
A structured list of all accounts used by a business to classify its financial transactions.
A person or organisation to whom a business owes money.
D
A person or organisation that owes money to a business.
The systematic allocation of the cost of a tangible asset over its useful life.
A distribution of a portion of a company's earnings to its shareholders.
An accounting system where every transaction is recorded in at least two accounts: a debit in one and a credit in another.
E
F
The 12-month period used for accounting and tax purposes.
A long-term tangible asset used in business operations and not expected to be sold within 12 months.
Fringe Benefits Tax.
G
The master record of all financial transactions for a business.
Goods and Services Tax.
I
Also called the Profit and loss Statement.
A document issued by a seller to a buyer detailing goods or services provided, quantities, prices, and payment terms.
J
A record of a financial transaction in the accounting system.
L
N
The total profit after all expenses, interest, and taxes have been deducted from revenue.
P
Pay As You Go.
A financial statement summarising revenue, costs, and expenses over a specific period.
A small amount of cash kept on hand to cover minor day-to-day business expenses such as office supplies or postage.
A formal document issued by a buyer to a supplier, authorising the purchase of goods or services at an agreed price.
An amount set aside in the accounts for a probable future liability or a reduction in the value of an asset.
R
A written acknowledgement that a payment has been made.
The process of comparing two sets of records to ensure they agree.
Income earned from normal business operations, such as sales of goods or provision of services.
The cumulative net profit of a company that has been retained in the business rather than distributed as dividends.
S
STP is an ATO reporting requirement where employers report payroll information including salaries, wages, PAYG withholding, and superannuation directly to the ATO each pay run.
A business structure where one person operates the business in their own name.
A compulsory retirement savings system in Australia.
T
An invoice that includes specific information required by the ATO for GST purposes.
A report listing all general ledger accounts and their balances at a point in time.
A bank account used to hold money on behalf of another party.
The total revenue or income of a business over a given period.
W
Current assets minus current liabilities.
The removal of an asset from the books when it is deemed unrecoverable or worthless.
Y
The process of finalising accounts at the end of a financial year.