Glossary

The accounting cycle represents a standardised sequence of procedures that accountants follow to record, process and report financial transactions during a specific accounting period.
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Generally Accepted Accounting Principles (GAAP) function as a comprehensive framework of accounting standards, procedures and guidelines that govern financial reporting.
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Accounts payable (AP) represents the money a company owes to vendors or suppliers for goods and services purchased on credit. These short-term debt obligations appear as liabilities on a company's balance sheet, reflecting unpaid bills that require settlement within a specified timeframe.
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Capital represents accumulated assets used to generate wealth and economic value. Unlike ordinary resources consumed in daily operations, capital functions as a productive resource that creates additional value when properly deployed. In financial contexts, it typically refers to money invested to generate returns.
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Capital expenditure (CapEx) refers to funds used by organisations to acquire, upgrade or maintain physical assets such as property, industrial buildings, equipment or technology infrastructure.
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Cash-basis accounting represents a straightforward method of financial record-keeping where transactions are recognised only when money physically changes hands. In other words, transactions are recorded only when money goes in or out of an account. 
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Cash flow represents the movement of money into and out of a business over a specific time period. It serves as a fundamental indicator of financial health, helping businesses understand their liquidity position. 
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Cash flow insolvency occurs when a business cannot meet its financial obligations as they fall due, despite potentially having positive net assets. This situation represents a fundamental liquidity crisis where a company has insufficient ready cash to pay creditors, suppliers, employees or other parties on time. 
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A cash flow statement is a financial document that tracks the movement of cash in and out of a business during a specific period. 
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In financial accounting, cash equivalents represent short-term, highly liquid financial instruments that organisations can readily convert to cash with minimal risk of value change.
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A chart of accounts represents the organised, comprehensive listing of every account in an organisation's accounting system. Think of it as the financial filing cabinet where each drawer and folder has a specific purpose and designation.
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Closing entries are specialised journal entries made at the conclusion of an accounting period to reset temporary accounts to zero and transfer their balances to permanent accounts. They represent a crucial step in the accounting cycle that prepares the books for a new fiscal period.
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Cloud storage provides a modern approach to digital data management, allowing information to be stored in virtualised pools across multiple servers maintained by third-party providers.
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Compliance refers to the process of adhering to laws, regulations, standards and internal policies that apply to an organisation. In financial and accounting contexts, compliance involves ensuring all financial activities, reporting and documentation meet both external regulatory requirements and internal control standards.
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Configurability refers to the capacity of any technology system to be adapted and tailored to specific business requirements without modifying the underlying code structure.
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A credit entry is an accounting record placed on the right side of a ledger account that either increases or decreases the account balance depending on the account type.
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In accounting, a debit balance refers to the amount, shown in the record of a company's finances, by which its total debits are greater than its total credits. This concept is fundamental to the double-entry bookkeeping system used in financial record-keeping.
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The foundation of modern accounting rests upon two essential concepts: debits and credits. Though these terms often cause confusion for beginners, they represent straightforward accounting mechanics. A debit entry represents money flowing out or an increase in assets, while a credit entry indicates money coming in or an increase in liabilities and equity.
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Debt capital refers to the funds a business raises by borrowing money that must be repaid over time, typically with interest.
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At its core, depreciation represents the systematic allocation of an asset's cost over its useful life. Rather than recording the entire expense when purchasing a long-term asset, businesses spread this cost across multiple accounting periods that benefit from the asset's use.
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Dividends represent distributions of a company's earnings to its shareholders. When businesses generate profits, they face three primary options: reinvest those earnings into operations, retain them as cash reserves or distribute a portion to shareholders as dividends.
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Double-entry accounting is a bookkeeping method where every financial transaction is recorded in at least two different accounts, maintaining the accounting equation that assets equal liabilities plus equity.
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Equity simply means ownership in a business. It represents the residual interest in the assets after deducting liabilities. It's calculated with a basic formula: Total Assets minus Total Liabilities.
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An equity account is a financial record that represents ownership interest in a company, showing the residual value of assets after deducting liabilities.
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Enterprise Resource Planning refers to integrated management software that organisations use to collect, store, manage and interpret data from various business activities.
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The financial close process refers to the series of procedures and tasks that accounting departments perform to conclude an accounting period, prepare financial statements and ensure all transactions are properly recorded.
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A financial forecast is a projection of future financial performance based on historical data, market trends and reasonable assumptions to guide business planning and decision-making.
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Financial ratios represent mathematical relationships between different elements found in financial statements. These calculated values quantify the connections between various financial data points, creating standardised metrics that allow for meaningful interpretation of a company's performance.
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When examining business resources, fixed assets represent tangible, long-term resources that organisations own and use in their operations. These physical items hold economic value and typically remain in service for extended periods, often years or decades.
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The Four-Eye Principle is a fundamental control mechanism in accounting and finance where two individuals must approve actions or decisions before they are finalised.
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Quantitative analysis refers to the systematic examination of numerical data through mathematical and statistical techniques to uncover patterns, test hypotheses and develop models that explain relationships between variables.
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SAP stands for Systems, Applications and Products in Data Processing. Developed in 1972 by five former IBM engineers in Germany, SAP has evolved from a basic financial accounting solution into the comprehensive enterprise management system used worldwide today.
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SFTP (Secure File Transfer Protocol) is a network protocol that provides secure file access, transfer and management capabilities over any reliable data stream. Unlike its predecessor FTP, SFTP operates through an encrypted SSH (Secure Shell) tunnel, ensuring that all transmitted data remains protected from unauthorised access.
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A spreadsheet is a digital document organised as a grid of rows and columns that creates cells where data can be entered, stored and manipulated. Each cell has a unique address comprising a column letter and row number (such as A1 or B2), allowing users to reference specific data points when creating formulas.
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