Glossary of Financial Accounting Terms
GlossarioTermini Contabilità Finanziaria

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Account Payable

An amount due for payment to a supplier of goods or services, also described as a "Trade Creditor".

Account Receivable

An amount due from a customer, also described as a trade debtor.

Accountancy Firm

A business partnership (or possibly a limited company) in which the partners are qualified Accountants.

The firm undertakes work for clients in respect of audit, accounts preparation, tax and similar activities.

Accountancy Profession

The collective body of persons qualified in accounting, and working in accounting-related areas.

Usually they are members of a professional body, membership of which is attained by passing examinations.


The process of identifying, measuring and communicating financial information about an entity to permit informed judgements and decisions by users of the information.

Accounting Equation

The relationship between assets, liabilities and ownership interest.

Accounting Period

Time period for which financial statements are prepared (e.g. month, quarter, year).

Accounting Policies

Accounting methods which have been judged by business enterprises to be most appropriate to their circumstances and adopted by them for the purpose of preparing their financial statements.

Accounting Standards

Definitive statements of best practice issued by a body having suitable authority.

Accounting Standards

Board The authority in the UK which issues definitive statements of best accounting practice.

Accruals Basis

The effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate (see also matching).

Accumulated Depreciation

Total depreciation of a non-current (fixed) asset, deducted from original cost to give net book value.

Acid Test

The ratio of liquid assets to current liabilities.


Company that becomes controlled by another.


Company that obtains control of another.


An acquisition takes place where one company – the acquirer – acquires control of another – the acquiree – usually through purchase of shares.

Acquisition Method

Production of consolidated financial statements for an acquisition.

Administrative Expenses

Costs of managing and running a business.


A relationship between a principal and an agent. In the case of a limited liability company, the shareholder is the principal and the director is the agent.

Agency Theory

A theoretical model, developed by academics, to explain how the relationship between a principal and an agent may have economic consequences.

Aggregate Depreciation

See accumulated depreciation.


To assign a whole item of cost, or of revenue, to a simple cost centre, account or time period.

Allocated, Allocation

See allocate.


Process similar to depreciation, usually applied to intangible fixed assets.

Annual Report

A document produced each year by limited liability companies containing the accounting information required by law. Larger companies also provide information and pictures of the activities of the company.

Articles of Association

Document setting out the relative rights of shareholders in a limited liability company.


The term 'articulation' is used to refer to the impact of transactions on the balance sheet and profit and loss account through application of the accounting equation.


Rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.

Associated Company

One company exercises significant influence over another, falling short of complete control.


An audit is the independent examination of, and expression of opinion on, financial statements of an entity.

Audit Manager

An employee of an accountancy firm, usually holding an accountancy qualification, given a significant level of responsibility in carrying out an audit assignment and responsible to the partner in charge of the audit.

AVVERTENZE D'UTILIZZO: Il presente glossario contiene la definizione dei termini indicati con riferimento alla Contabilità Finanziaria.
La spiegazione di ciascuno dei termini indicati in questo glossario è di carattere meramente orientativo e priva di valore legale; si raccomanda, quindi, di tenere conto del contesto e dell'evento in cui essi vanno applicati, in quanto il significato loro attribuito potrebbe differire rispetto a quello qui rappresentato.

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