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Bad Debt: it arises when a person or company is not expected to pay the debt. For example, because the company has gone into liquidation. Bad debts must be written-off and therefore they will reduce profit. A bad debt becomes a bad debt when a business decides it is one. The decision is often based on past experience. Decisions are made by keeping a list of all debtors (aged debtors) and reviewing this list periodically. If a business is having difficulties collecting money owed from one of its customers it may decide to cancel the debt. This is called a write-off and the accounts would need to be adjusted for this write-off.

Balance Brought Down: the difference between both sides of an account that is entered below the totals on the opposite side to the one on which the balance carried down was entered (this is normally abbreviated to "balance b/d").

Balance Carried Down: the difference between both sides of an account that is entered above the totals and makes both sides equal to each other (this is normally abbreviated to "balance c/d").

Balance Sheet: a report that details the various assets and liabilities of a business at a point in time, usually the end of an accounting period. A Balance Sheet must always balance, i.e. debits must always equal the credits.

Bank Cash Book: a cash book that only contains entries relating to payments into and out of the bank.

Bank Giro Credit: an amount paid by someone directly into someone else's bank account.

Bank Loan: an amount of money advanced by a bank that has a fixed rate of interest that is charged on the full amount, and is repayable by a specified future date.

Bank Reconciliation: the process of matching transaction from accounting records against those presented on a bank statement. The accounting ledger should reconcile (match) to the balance of the bank statement. Bank reconciliation will reveal any possible discrepancies.

Bank Reconciliation Statement: a calculation comparing the Cash Book balance with the bank statement balance.

Bank Statement: a record of bank account transactions issued by a bank to a customer.

Bankrupt: a person, firm, or corporation that has been declared insolvent through a court proceeding and is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.

Bankruptcy Order: the court order making an individual bankrupt.

Bankruptcy Petition: a written application to Court by either a debtor or his creditors applying for an order to be made for the debtor to be made bankrupt.

Bonus Issue: a bonus share is a free share of stock given to current/existing shareholders in a company, based upon the number of shares that the shareholder already owns at the time of announcement of the bonus. While the issue of bonus shares increases the total number of shares issued and owned, it does not increase the value of the company. Although the total number of issued shares increases, the ratio of number of shares held by each shareholder remains constant. Whenever a company announces a bonus issue, it also announces a “Book Closure Date” which is a date on which the company will ideally temporarily close its books for fresh transfers of stock. An issue of bonus shares is referred to as a bonus issue.Depending upon the constitutional documents of the company, only certain classes of shares may be entitled to bonus issues, or may be entitled to bonus issues in preference to other classes. Bonus share is free share in fixed ratio to the shareholders. Sometimes a company will change the number of shares in issue by capitalising its reserve. In other words,it can convert the right of the shareholders because each individual will hold the same proportion of the outstanding shares as before. Main reason for issuance is the price of the existing share has become unwieldy. Also known as a “scrip issue” or “capitalization issue”.

Bonus Shares: shares issued to existing shareholders free of charge. (Also known as scrip issues.) Book Keeping The process of recording the day to day accounting transactions of a business.

Book Value: the book value of an asset or group of assets is the price at which they were originally acquired (usually the purchase price). Book value forms the basis of various calculations e.g. of nominal capital gains (current value divided by book value), of amortized value (book value adjusted for depreciation).

Break-Even: point The level of activity at which total gross profit equals total costs.

Bought Ledger: another name for Purchase Ledger. This is where the individual accounts of creditors for goods and services are kept in a single ledger.

Budget: a forecast of expected income or expenditure over a specified period of time.

Budget Variance: the difference between the expected and actual amount for income or expenditure.

Business Entity Concept: assumption that only transactions that affect the business and not the owner's private transactions will be recorded.

Business-To-Business (B2B): businesses purchase from other businesses and/or sell their goods and services to other businesses.

Business-To-Customer (B2C): businesses which sell to consumers.