Vocabulary Words Every Accounting Clerk Should Know

Account

Definition: A record of financial transactions; a personal description of events.

• She opened an account at the bank.
• He shared his account of what happened.
• The account showed all his expenses.

Account in a sentence

Bill

Definition: a statement of money owed

• He received a bill for his phone service.
• The bill was higher than expected.
• She paid the bill at the restaurant.

Bill in a sentence

Cash

Definition: Money in the form of coins or banknotes.

• I prefer to pay in cash.
• He kept some cash in his wallet.
• They accepted cash for the ticket.

Cash in a sentence

Cost

Definition: The amount of money needed to buy something.

• The cost of the book is ten dollars.
• She checked the cost of the concert tickets.
• It may cost more to travel during the holidays.

Cost in a sentence

Debt

Definition: Money owed to someone; an obligation to pay back.

• He is trying to pay off his debt.
• She learned about managing debt in finance class.
• Living within your means helps avoid debt.

Debt in a sentence

Income

Definition: The money received for work or through investments.

• Her income helps support the family.
• He saved part of his income for a vacation.
• They discussed ways to increase their income.

Income in a sentence

Invoice

Definition: A document that itemizes and records a transaction between a buyer and a seller.

• The company sent an invoice for the services provided.
• She checked the invoice for any errors before paying.
• An invoice is usually due within 30 days.

Invoice in a sentence

Money

Definition: Paper or coins used to buy things.

• I need money to buy a new book.
• He saved his money for a new bike.
• We use money to pay for food.

Money in a sentence

Pay

Definition: To give money for goods or services.

• I will pay for my lunch today.
• She forgot to pay the bill on time.
• They need to pay for their movie tickets.

Pay in a sentence

Price

Definition: The amount of money required to buy something.

• The price of the shirt is ten dollars.
• I found a good price for my favorite book.
• Prices change depending on the store.

Price in a sentence

Receipt

Definition: A document acknowledging that something has been received, especially in transactions.

• He kept the receipt for his new shoes.
• She asked for a receipt after buying the groceries.
• Understanding receipts is important for budgeting.

Receipt in a sentence

Save

Definition: To keep something safe or to store for later.

• I save money for a new bike.
• Please save your work before turning off the computer.
• They save energy by using less electricity.

Save in a sentence

Tax

Definition: A compulsory financial charge imposed by the government.

• Everyone pays tax on their income.
• He learned about tax rates in his economics class.
• Taxes fund public services like schools and roads.

Tax in a sentence

Total

Definition: the complete amount or sum

• The total cost of the items is $50.
• She calculated the total for the bill.
• Understanding total helps in math.

Total in a sentence

Value

Definition: The importance or worth of something.

• Honesty has great value in life.
• The value of gold is very high.
• She understands the value of hard work.

Value in a sentence

Balance

Definition: A state of stability; an equal distribution of weight or amount.

• It's important to maintain a balance between work and play.
• She tries to balance her studies and hobbies.
• The scale showed a perfect balance.

Balance in a sentence

Credit

Definition: Recognition or acknowledgment, often for work done.

• She received credit for her hard work.
• You need to give credit to the author.
• He got credit for his contribution to the project.

Credit in a sentence

Debit

Definition: An entry recording an amount owed or payment made, often in a bank account.

• The debit from my account was for groceries.
• She checked her bank statement for recent debits.
• Understanding debits is important for managing money.

Debit in a sentence

Expense

Definition: The cost incurred in the course of doing business or personal activities.

• She tracked her monthly expenses carefully.
• The expense report was submitted for approval.
• Understanding expense management is crucial for budgeting.

Expense in a sentence

Payment

Definition: Money given for goods or services.

• I made my payment for the concert tickets.
• The payment is due at the end of the month.
• We can process your payment online.

Payment in a sentence

Revenue

Definition: The income generated from normal business operations.

• The company's revenue increased this year.
• They need to find ways to boost their revenue.
• Government revenue comes from taxes.

Revenue in a sentence

Salary

Definition: The money paid to someone for their work.

• Her salary increased after the promotion.
• He is happy with his salary at the new job.
• Many people want a higher salary for their skills.

Salary in a sentence

Transaction

Definition: an instance of buying or selling something

• The transaction was completed online.
• He received a receipt for the transaction.
• They tracked the transaction in their records.

Transaction in a sentence

Budget

Definition: A plan for managing money; an estimate of income and expenses.

• I need to create a budget for my monthly spending.
• We saved money by sticking to our budget.
• The school has a budget for supplies and activities.

Budget in a sentence

Report

Definition: A spoken or written account of something.

• I need to write a report about my science project.
• The news report covered the recent event.
• He will report the findings to the class.

Report in a sentence

File

Definition: A collection of documents or data stored together.

• I need to organize my files on the computer.
• He saved the file in a new folder.
• Please check the file for the latest updates.

File in a sentence

Record

Definition: To capture or store information; a written account of something.

• I will record the lecture for later.
• They set a new record in the race.
• She likes to record her thoughts in a journal.

Record in a sentence

Statement

Definition: A clear expression of something in speech or writing.

• The teacher asked for a statement about the project.
• He made a statement about his favorite book.
• She wrote a statement to explain her opinion.

Statement in a sentence

Amount

Definition: A quantity of something, especially when referring to money or measurements.

• The amount of sugar in the recipe is two cups.
• He saved a large amount of money for his trip.
• Understanding amounts helps in budgeting and measurements.

Amount in a sentence

Payroll

Definition: The list of employees and the amount of money they are paid.

• The company updates its payroll every month.
• She works in the payroll department.
• They need to check the payroll for accuracy.

Payroll in a sentence

Asset

Definition: Something valuable owned by a person or company.

• The house is their biggest asset.
• Her skills are a great asset to the team.
• Investing in education is an important asset.

Asset in a sentence

Liability

Definition: the state of being responsible for something, especially in law

• He accepted liability for the accident.
• The company has a liability to its employees.
• Understanding liability is important in business.

Liability in a sentence

Profit

Definition: The financial gain made after subtracting expenses.

• The business made a profit last year.
• They hope to increase their profit this quarter.
• His hard work led to a profit for the company.

Profit in a sentence

Loss

Definition: the state of losing something; not having something anymore

• His loss of a pet made him very sad.
• The team felt the loss of their star player.
• She experienced a loss when her grandmother passed away.

Loss in a sentence

Audit

Definition: An official examination of accounts or financial records.

• The school will conduct an audit of its budget.
• An audit helps ensure that everything is accurate.
• They hired a company to perform the audit for transparency.

Audit in a sentence

Financial

Definition: Related to money or the management of money.

• She took a course in financial planning.
• The company is in a strong financial position.
• He needs financial advice for his budget.

Financial in a sentence

Accounting

Definition: The process of recording and analyzing financial transactions.

• He studies accounting to understand business finances.
• Accounting is important for keeping track of money.
• She works in accounting for a large corporation.

Accounting in a sentence

Ledger

Definition: A book or digital record used for keeping financial accounts.

• The accountant keeps a ledger of all transactions.
• We reviewed the ledger to find the expenses.
• The ledger helps track income and spending.

Ledger in a sentence

Receivable

Definition: An amount of money owed to a company or individual.

• The company has many receivables from clients.
• They monitor their receivable accounts closely.
• Managing receivables is essential for cash flow.

Receivable in a sentence

Payable

Definition: an amount that needs to be paid

• The invoice shows the total amount payable by the end of the month.
• They need to keep track of all payable accounts.
• She checked which bills were payable this week.

Payable in a sentence

Reconciliation

Definition: The process of restoring friendly relations or resolving differences.

• They sought reconciliation after their argument.
• Reconciliation is important for maintaining friendships.
• The reconciliation of their views led to a better understanding.

Reconciliation in a sentence

Fiscal

Definition: Related to government revenue, spending, and financial matters.

• The government announced a new fiscal policy.
• Fiscal responsibility is important for a healthy economy.
• She studied fiscal management in her finance course.

Fiscal in a sentence

Equity

Definition: Fairness or justice in the way people are treated; ownership in a property.

• They believe in equity for all students.
• The company focuses on promoting equity in the workplace.
• She discussed equity in education during the meeting.

Equity in a sentence

Depreciation

Definition: the decrease in value of an asset over time

• The car's depreciation means it's worth less than when we bought it.
• Understanding depreciation helps in calculating taxes.
• He learned about depreciation in his finance class.

Depreciation in a sentence

Journal

Definition: A personal record of thoughts, experiences, or observations.

• She writes in her journal every night.
• The journal helps him reflect on his day.
• Keeping a journal can improve writing skills.

Journal in a sentence

Forecast

Definition: a prediction about future events

• The weather forecast says it will rain tomorrow.
• We reviewed the economic forecast for next year.
• The forecast showed sunny skies ahead.

Forecast in a sentence

Accrual

Definition: The accumulation of something over time.

• Accrual of interest can increase savings.
• The accountant explained the accrual process.
• Accrual accounting reflects financial realities.

Accrual in a sentence

Amortization

Definition: The process of gradually paying off a debt over time.

• Amortization schedules help manage loan payments.
• He learned about amortization in finance class.
• Understanding amortization is important for budgeting.

Amortization in a sentence

Inventory

Definition: A list of items in stock or available.

• The store keeps an inventory of all products.
• We need to check the inventory before ordering more.
• His job is to manage the inventory of supplies.

Inventory in a sentence

Expenditure

Definition: the amount of money spent

• The expenditure for the trip was higher than expected.
• She tracked her monthly expenditure carefully.
• Understanding expenditure helps in financial planning.

Expenditure in a sentence

Balance Sheet

Definition: a financial statement showing assets, liabilities, and equity

• The accountant prepared the balance sheet for the company.
• A balance sheet helps assess financial health.
• They reviewed the balance sheet at the meeting.

Balance Sheet in a sentence

Financial Statement

Definition: A formal record of the financial activities of a business or individual.

• The financial statement showed a profit for the year.
• She reviewed the company's financial statement carefully.
• Understanding financial statements is crucial for investors.

Financial Statement in a sentence

Cash Flow

Definition: The movement of money in and out of a business or personal account.

• Monitoring cash flow is important for financial health.
• He created a cash flow plan for his new business.
• Understanding cash flow helps in budgeting and planning.

Cash Flow in a sentence

Variance

Definition: The difference between what is expected and what actually occurs.

• The variance in test scores surprised the teacher.
• Understanding variance can help improve future performance.
• The financial report showed a variance in expenses.

Variance in a sentence

Compliance

Definition: Following rules or standards.

• The company is in compliance with safety regulations.
• They ensured compliance with the new laws.
• She checked for compliance with the guidelines.

Compliance in a sentence

Taxation

Definition: The process of collecting taxes from individuals and businesses by the government.

• Taxation is used to fund public services.
• They learned about taxation in social studies.
• Understanding taxation helps with financial planning.

Taxation in a sentence

Overhead

Definition: Above or higher than something else; often used to describe costs or space.

• The overhead lights brightened the room.
• They discussed overhead costs during the meeting.
• The overhead view of the city was stunning.

Overhead in a sentence

Bookkeeping

Definition: The process of recording financial transactions.

• Bookkeeping is essential for managing a business.
• She studied bookkeeping in her accounting course.
• Good bookkeeping helps keep track of expenses and income.

Bookkeeping in a sentence

Forecasting

Definition: The process of making predictions about future events based on data or trends.

• Weather forecasting helps us prepare for storms.
• The company relies on sales forecasting to plan production.
• He learned about forecasting in his economics course.

Forecasting in a sentence

Allocation

Definition: The process of distributing resources or duties for a specific purpose.

• The allocation of funds will help improve the library.
• They discussed the allocation of tasks among team members.
• Understanding allocation is important for project management.

Allocation in a sentence

Consolidation

Definition: the process of combining multiple things into one

• The consolidation of the two companies created a larger business.
• They are working on the consolidation of their debts.
• Understanding consolidation helps in understanding finance.

Consolidation in a sentence

Ratio

Definition: A relationship between two numbers or amounts.

• The ratio of students to teachers is important for learning.
• He calculated the ratio of boys to girls in the class.
• Understanding ratios helps with comparisons.

Ratio in a sentence

Profitability

Definition: The ability of a business to earn more money than it spends.

• Profitability is essential for the survival of a business.
• They analyzed the profitability of their new product.
• Understanding profitability helps in financial planning.

Profitability in a sentence

Trial Balance

Definition: An accounting report that lists the balances of all general ledger accounts at a specific time.

• The accountant prepared a trial balance to check for errors.
• He learned how to create a trial balance in class.
• The trial balance helps ensure accounts are accurate.

Trial Balance in a sentence

Solvency

Definition: The ability of an individual or organization to meet its long-term financial obligations.

• The company’s solvency was assessed during the audit.
• Maintaining solvency is crucial for business success.
• He learned about solvency in his finance class.

Solvency in a sentence

Liquidity

Definition: The ease with which an asset can be converted into cash.

• High liquidity means you can quickly access your money.
• She learned about liquidity in her finance class.
• Understanding liquidity is essential for financial management.

Liquidity in a sentence

Chart Of Accounts

Definition: A list of all accounts used in a company's financial system.

• The accountant prepared the chart of accounts.
• Understanding the chart of accounts is important for budgeting.
• He organized the chart of accounts for clarity.

Chart Of Accounts in a sentence

Subsidiary

Definition: A company controlled by another, larger company; also refers to something of secondary importance.

• The corporation owns several subsidiary companies.
• She works for a subsidiary of a larger firm.
• Subsidiary businesses often support the main company.

Budgetary

Definition: Relating to the budget; concerning financial planning.

• They discussed budgetary constraints during the project.
• Budgetary decisions affect all departments.
• She prepared a budgetary report for the committee.

Budgetary in a sentence

Financial Analysis

Definition: The process of assessing the viability and performance of a business financially.

• He conducts financial analysis for investment decisions.
• Financial analysis helps in budgeting.
• She learned about financial analysis in her course.

Financial Analysis in a sentence

Regulatory

Definition: Related to rules or laws governing an activity or process.

• The regulatory agency oversees food safety.
• They must follow strict regulatory guidelines.
• Understanding regulatory requirements is important in business.

Regulatory in a sentence

Due Diligence

Definition: The careful review and consideration of important information.

• Due diligence is necessary before making big decisions.
• He conducted due diligence before investing in the company.
• Performing due diligence helps prevent mistakes.

Statement Of Cash Flows

Definition: A financial report showing how cash is generated and used over a period.

• The statement of cash flows is crucial for understanding liquidity.
• She analyzed the statement of cash flows for the company.
• Understanding the statement of cash flows helps in finance.

Statement Of Cash Flows in a sentence

General Ledger

Definition: A complete record of all financial transactions in a business.

• The accountant updated the general ledger monthly.
• Understanding the general ledger is key for finance.
• They reviewed the general ledger for accuracy.

General Ledger in a sentence

Cost Accounting

Definition: The process of tracking, recording, and analyzing costs associated with a business.

• Cost accounting helps businesses understand their expenses.
• She studied cost accounting to improve financial management.
• Effective cost accounting is crucial for profitability.

Cost Accounting in a sentence

Internal Controls

Definition: procedures and processes to ensure the integrity of financial and operational activities

• Effective internal controls help prevent fraud.
• The company implemented internal controls to safeguard assets.
• Understanding internal controls is crucial for organizational security.

Internal Controls in a sentence

Financial Reporting

Definition: the process of documenting a company's financial status

• Financial reporting provides transparency to stakeholders.
• He studied financial reporting standards in school.
• Accurate financial reporting is essential for businesses.

Dividend

Definition: A payment made by a corporation to its shareholders; a share of profits.

• The company announced a dividend for its investors.
• He received a dividend from his stock investments.
• Understanding dividends can help in financial planning.

Dividend in a sentence

Markup

Definition: The amount added to the cost of a product to determine its selling price.

• The markup on the items was 20% over cost.
• Understanding markup is important for pricing strategies.
• She calculated the markup for the new product line.

Markup in a sentence

Write-off

Definition: An amount that is deducted from taxable income or a debt that will not be paid.

• The company had to declare a write-off for the lost inventory.
• He claimed the expenses as a write-off on his taxes.
• The bank agreed to a write-off after the loan default.

Receivables

Definition: Money that is owed to a company or organization.

• The business has outstanding receivables from customers.
• Tracking receivables helps maintain financial health.
• They hired a team to manage their receivables.

Receivables in a sentence

Payables

Definition: amounts that a company owes to suppliers or creditors

• The payables must be settled before the end of the month.
• He managed the company's payables efficiently.
• Understanding payables is crucial for cash flow management.

Payables in a sentence

Accrual Basis

Definition: An accounting method that recognizes revenue when earned.

• The accrual basis is common in businesses.
• Using the accrual basis helps in financial analysis.
• He learned the accrual basis of accounting in school.

Accrual Basis in a sentence

Matching Principle

Definition: An accounting concept that expenses should be matched with revenues.

• The matching principle ensures accurate financial reporting.
• Understanding the matching principle is important for accountants.
• He learned about the matching principle in his finance class.

Matching Principle in a sentence

Double-entry Bookkeeping

Definition: An accounting method that records each transaction in two accounts.

• Double-entry bookkeeping ensures accuracy in financial records.
• He learned double-entry bookkeeping in his business class.
• Understanding double-entry bookkeeping is essential for accountants.

Double-entry Bookkeeping in a sentence

Net Income

Definition: The amount of money earned after all expenses and taxes are deducted.

• His net income allows him to save for the future.
• She calculated her net income for budgeting purposes.
• Net income is an important figure for understanding finances.

Net Income in a sentence

Gross Profit

Definition: the revenue remaining after deducting the cost of goods sold

• The business calculated its gross profit for the year.
• He learned how to maximize gross profit in class.
• Tracking gross profit helps in understanding financial health.

Gross Profit in a sentence

Operating Expenses

Definition: The costs associated with running a business on a day-to-day basis; includes rent, utilities, and salaries.

• The company's operating expenses increased this quarter.
• She learned to track operating expenses for better budgeting.
• Understanding operating expenses is important for financial health.

Operating Expenses in a sentence

Fixed Assets

Definition: Long-term tangible assets owned by a business, such as buildings or machinery.

• The company invested in fixed assets to grow.
• Understanding fixed assets is important for accounting.
• They reviewed the fixed assets during the audit.

Current Assets

Definition: Assets that are expected to be converted into cash within a year.

• The company reported its current assets in the financial statement.
• Understanding current assets is important for financial planning.
• She learned about current assets in her business class.

Current Assets in a sentence

Long-term Liabilities

Definition: Obligations that are due more than one year in the future; debts that are not immediately payable.

• Long-term liabilities include loans and mortgages.
• The business reported its long-term liabilities in the financial statement.
• Understanding long-term liabilities is important for financial planning.

Long-term Liabilities in a sentence

Short-term Liabilities

Definition: financial obligations due within a year

• The business needs to manage its short-term liabilities carefully.
• He learned about short-term liabilities in his finance class.
• They created a plan to reduce short-term liabilities over time.

Retained Earnings

Definition: The portion of a company's profits that is kept for future use instead of being paid out as dividends.

• The company has significant retained earnings to invest in new projects.
• Retained earnings can help a business grow over time.
• Shareholders often look at retained earnings for financial health.

Retained Earnings in a sentence

Working Capital

Definition: the funds available for day-to-day operations

• A business needs working capital to operate smoothly.
• Understanding working capital is crucial for financial health.
• They managed their working capital carefully.

Working Capital in a sentence

Capital Expenditure

Definition: Money spent by a business to acquire or upgrade physical assets.

• The company approved a capital expenditure for new equipment.
• Understanding capital expenditure is important for budgeting.
• They tracked capital expenditure to manage finances.

Capital Expenditure in a sentence