This bitesize glossary gives a summary of words that you may encounter when maintaining the accounts of sole traders and partnerships, using an accounting system that has been created by software.
It is not definitive and has a few useful extras, as its purpose is to acknowledge the range of terminology you are likely to come across and equipped you with the knowledge and skills to recognise groups of terms and to use them interchangeably.
| Key term | Also known as | Referred to in accounting software as |
| General ledger | Main or nominal ledger | Chart of accounts / Nominal |
| Income | Revenue |
|
| Revenue from sales revenue | Turnover or sales |
|
| Expenses |
| Overhead, direct cost/ cost of sales or cost of goods sold |
| Depreciation charge(s) | Depreciation |
|
| Diminishing balance depreciation | Reducing balance depreciation |
|
| Carrying amount | Net book value |
|
| Current assets |
|
|
| Inventories | Stock |
|
| Cash and cash equivalents | Cash at bank and in hand |
|
| Current liabilities |
|
|
| VAT |
| Sales tax |
| Non-current assets | Fixed assets |
|
| Non-current liabilities | Long-term liabilities |
|
| Equity | Capital |
|
| Retained earnings | Profit |
|
| Profit from operations | Operating profit |
|
| Profit/loss for the year/ period | Net profit/loss |
|
| Drawings |
|
|
| Sales ledger | Receivables ledger | Customers |
| Sales ledger control accou-nt (SLCA) | Trade receivables account / Account receivable / Trade debtors |
|
| Other receivables | Prepayments |
|
| Purchases ledger | Payables ledger | Suppliers |
| Purchases ledger control account (PLCA) | Trade payables account / Accounts payable Trade creditors | Vendors |
| Other payables | Accruals |
|
| Subsidiary accounts | Memorandum accounts |
|
| Sales invoice | Invoice |
|
| Purchase invoice | Invoice | Bill |
| Financial statements | Financial accounts |
|
| Statement of profit or loss (SoPL) | Income statement |
|
| Statement of financial position | Balance sheet |
|
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Gill Myers is a self-employed accounts consultant. She has taught AAT qualifications since 2005 and written numerous articles and e-learning resources.
