ACCOUNTING TERMINOLOGY

PAY : Pay, credit. Record an accounting item. As is generally accepted

practice, items are credited to the right side of the account books.

CREDIT: Pay. Record on the credit or side of the accounting books. Make a
sum available.

CREDITOR: Person or firm to whom it is owed. In accounting, the accounts

whose sum is greater on the credit or right side. Credit balances reflect
participation in the business or liabilities.

ASSETS : Assets that belong to a person or firm. The left side of a balance
sheet. The asset is made up of the company's assets, that is, real estate,
furniture, merchandise, accounts receivable, etc.

AMORTIZE: Make partial payments of a debt. Decrease the value of a deferred

expense. The assets that make up the Intangible Asset (see) are amortized
according to estimated times or legal provisions.

The term amortize is also used to mean depreciation, that is, a decrease in the
value of a physical asset (see depreciation), even when the concept is not its
own.

ANTICHRESIS: Contract by which a property is granted in usufruct until the

debt is paid.

ANNUITIES: A series of equal payments made at regular intervals (usually a

year, quarter, or month). These regular payments are called “annuities.”

The amount of an annuity is the sum of the income amounts at compound

interest, computed at the end of the period.

AUDIT: Review of accounting books to verify the accuracy of the records, their
conformity with the standards and the authenticity of the supporting vouchers.

BALANCE SHEET: It is the statement that shows shares of a company.

It is obvious that the sums of the assets and the shares are equal and therefore
the items shown do not correspond to reality, neither in their amounts nor in
their classification.

BANKING: Businesses consisting of drawing, discounting credit documents,

maintaining checking accounts, buying and selling public securities or foreign
currency on behalf of others receiving a commission, opening letters of credit
and making collections.

PROFIT: The difference in favor of the owners between the income and the
total costs.

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BOND: Title issued by governments or private companies in order to increase
their financial resources and that require the holder to pay interest.

BURSATIL: Belonging to or relating to stock market businesses.

CAPITAL: Element of production formed by the accumulated wealth that is

used again.

Participation of the owners in the business.

CARTEL: Agreement or agreement between companies dedicated to the same

line of business to avoid competition. Trust, or union of companies for
monopolistic purposes, production, distribution or sale, where prices are set.

CODE OF ACCOUNTS: Also called a catalog or chart of accounts, it is the

nomenclature that the accountant uses to make entries. This list, which contains
the names of the accounts duly ordered and numbered, is generally made up of
“classes”, that is, divisions of Assets, Liabilities and performance accounts.

The account code results from the Financial statements that you want to
PRODUCE AND MUST CONSIDER Both main and subsidiary accounts.

CONCILIATION: It consists of the adjustment made to an account to harmonize

it with its counterpart. Especially in bank accounts, the movement that the
company makes is opposite to that carried out by the Bank and in addition there
could actually be deposits in checking accounts that are charges for the
company and credits for the client in the bank.

CONSOLIDATION: Merge the parts of a debt, a state, balance sheet, etc. into
one.

Debts are consolidated to obtain better conditions from a single creditor or to

better control them >; the states and balances to observe them as a whole;
when they belong to associated companies or the same owners: In the latter
case also to know the total assets or net value of the companies.

ACCOUNTING: Accounting is a set of techniques that, based on science, such

as mathematics, are associated with business to record operations, control
them, relate them, know costs and income, predict future behavior of events,
organize production , finances, jobs, etc.

COST: The expenses demanded by the event of the company in general or the
expenditures to obtain or produce a good, in more restricted terms it is the set
of expenses assigned to the product, that is to say that it has not been
considered appropriate to consider it as a loss and is kept in inventory, that is, a
deferred expense.

CREDIT: Believe or trust in something or someone. Have a good reputation.

Confidence in the good reputation of an individual or firm to meet its financial

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obligations. In accounting, recording a debtor's payment; record credit balance
on the credit or right side of the books.

CHECK: Payment order issued by the holder of a current bank account. The
check should not be considered a credit document, but rather as an order to
pay, under the assumption that the current account holder has funds in his
favor; Hence, writing bad checks is considered in some countries as a crime of
fraud.

DEPRECIATION: Decrease in the value of a physical asset over time. Of

physical assets, perhaps the only one that does not deteriorate due to use or
the passage of time is the land; the rest lose value due to physical, functional or
accidental deterioration.

DEFER: Delay, postpone or suspend. The accounts are defined so that they do
not fall in a single period, when they correspond to several or subsequent ones.

DIVIDENDS: Fee earned by each share or portion of capital, for the net profits
of a company. How I wish that companies do not distribute all of the profits;
Since by agreements of the General Meeting or because they have decided to
reserve a part of the profits, the part that corresponds to each share of what is
to be repeated is commonly called a dividend.

CASH FLOW: It is known as cash-flow, an English concept that literally means

in English, it is because as “cash flow”

The fact that accountants mostly use the cash forecast in English is of great
importance, especially for long-term planning, since to obtain it, the company
has had to make the entire disbursement that its costs demanded (of course
without depreciation). )

MORTGAGE: Real right that affects real estate, subjecting them to respond for
the payment of a credit obligation. The asset may be affected by more than one
mortgage, and then the rights are established according to the order in which
they were mortgaged.

INVENTORY : Set of stocks. Assets of a company. The term inventory is

generally used to refer to goods that are classified in current assets, i.e.
merchandise, in-process and finished items, raw materials, etc.

LIQUIDITY: It is said of the asset that it is money or can easily be transformed

into cash when the asset. current exceeds the current liabilities, it is said that a
company has good liquidity, on the contrary, it speaks of lack of liquidity when
the company has frozen its resources in fixed assets or assets that are difficult
to realize.

Lack of liquidity causes bankruptcy. The cash is made up of the most liquid
assets.

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OBSOLESCENCE: It means out of fashion or use, with it, accountants and
economists refer to capital goods that have lost validity in the industry, either
due to better investments, or because they have lost validity in the industry
either due to investments. better or because they have lost the capacity to
satisfy demand.

PATENT: Rights granted by a state to use an invention for the benefit of certain
people. Also the certificate where the payment of the rights to carry out a
commercial or industrial activity is accredited.

BANKRUPTCY: Cessation or suspension of a firm due to inability to pay its

obligations due to lack of cash.

INCOME: Benefit that an investment periodically yields.

BALANCE: Difference between the debit and credit sums of an account. When
a trial balance is made, the debit balances make up the assets and the creditors
make up the liabilities.

VALUE: In economics the term refers to the utility that a person attributes to a
good or even service. Evaluating means giving or attributing value to things
without this being confused with price, much less with cost.

MOVABLE VALUE: Public effects to the bearer or transferable by

endorsement.

VALUATION: Give or indicate value to a good, value being understood as the

quality of things being desired in such a way that an amount of money or
something equivalent is given for them.

VARIATION: Arithmetic difference between two quantities in cost, generally

between the normal standard, budget, etc. And the real also between what
happened in one period and another.

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