Accounting period

The period of time covered by a financial report.

Administration charge

A charge for borrowing money. See also

'interest': in some cultures it is not appropriate

to use the term 'interest' for such a charge.

Analysed cash book

A cash book with separate columns to record

major categories of income and expenditure.

Assets

The things owned by an individual or

organization. For example, cash, money in a

bank account, or furniture.

Audit

An independent examination of and

expression of opinion on the books and

records of an enterprise.

Bad debt

A loan which cannot be recovered.

Balance

1 An amount remaining. For example, the

cash balance is the cash remaining in a cash

box; the balance of a loan is the amount of the

loan less repayments already made.

2 The bookkeeper balances the accounts by

agreeing the closing balance in the cash book

to the cash held in the cash box (the cash

count) and by agreeing the closing balance in

the bank book to the bank statement (the bank

reconciliation).

Balance brought forward

See 'opening balance'.

Balance carried forward

See 'closing balance'.

Balance Sheet

A list of the assets and liabilities of an

organization.

Bank book

The record of the transactions of an

organization with its bank.

Bank Statement

A report issued by the bank (usually monthly)

detailing its transactions on behalf of a

customer.

Bank reconciliation

An investigation of the difference (if any)

between the bank balance shown in the bank

book and the bank balance shown on the bank

statement.

Bookkeeper

The person responsible for maintaining

accounting records.

Budget

An estimate of the likely income and

expenditure of an organization for a specified

time period. A costed plan.

Budget and actual report

A comparison of budgeted income and expenditure

against actual income and expenditure for an

accounting period.

Capital

1 The original funding of a project or

organization.

2 Money advanced as a loan.

Capital expenditure

Expenditure on assets such as equipment,

furniture or vehicles.

Cash book

The record of the cash transactions of an

organization. Records all cash coming in and

going out.

Cash box

A lockable box in which cash is kept.

Cash count

Counting cash, usually to ensure the amount

held agrees with the balance shown in the

cash book.

Cashier

The person responsible for cash handling.

Creditor

A person or group who is entitled to receive

money from an organization.

Closing balance

The amount remaining at the end of an

accounting period. For example, the closing

balance in a cash book is the cash remaining at

the end of the accounting period. The closing

balance at the end of one accounting period

will be the opening balance at the start of the

next accounting period.

Debtor

A person or group who owes money to an

organization.

Deficit

If expenditure is greater than income in an

accounting period the organization has

incurred a deficit in that accounting period.

Division of duties

Arranging the accounting tasks so that no one

person is responsible for all the procedures.

Inflation

A measure of the increase in the general level

of prices.

Interest

1 A charge for borrowing money.

2 A payment for lending money.

(Usually calculated as a percentage of the

amount advanced.)

Invoice

A bill issued by a supplier to a customer.

Liabilities

Amounts owed by an individual or organi

sation to another individual or organization.

For example, a loan taken but not yet repaid or

goods received but not yet paid for.

Loan agreement

An agreement between a lender and a

borrower concerning the terms of the loan.

For example, the amount, the purpose of the

loan, the repayment schedule, and the

interest to be charged.

Loan register

A record of the transactions relating to a loan,

that is, details of the borrower, the amount

advanced, the purpose of the loan, the

repayment terms, the interest charged, and

the repayments made.

Management committee

The group of people responsible for managing a

project. (In this book, used to refer to the people

running a credit and savings scheme.)

Management information

Financial summaries and reports prepared for the

managers of an organization.

Net assets

The total assets of an organization when the

total liabilities have been paid. (Sometimes

referred to as the 'book value' of the

organization.)

Opening balance

The amount held at the start of an accounting

period. For example, the opening balance in

the cash book is the cash held at the start of the

accounting period. The opening balance at

the start of an accounting period should be the

same as the closing balance at the end of the

previous accounting period.

Passbook

A saver's record of his or her transactions

with the saving scheme or a customer's record

of his or her transactions with their bank.

Payment voucher

An internal document used to record the

details of a payment.

Profit and loss account

A schedule explaining how the surplus

generated or deficit incurred by a commercial

organization was achieved.

Receipts and

A summary of the income received and

payments report

payments made during an accounting period.

Receipt voucher

Document issued by someone receiving

money to the person from whom they receive

it.

Repayment plan

A plan for the timing and size of instalments

to repay a loan.

Revenue expenditure

Expenditure on running costs such as rent,

salaries, or fuel.

Savings card

A saver's record of his or her transactions

with the saving scheme. The savings card

should record all amounts deposited and

amounts withdrawn, and any interest paid to

the saver.

Stock

Items purchased for resale.

Stocktake

Checking the stock held in the store against

the stock records.

Surplus

If income is greater than expenditure in an

accounting period the organization has

generated a surplus in that accounting

period.

Treasurer

The member of the management committee

responsible for overseeing the financial

management of the project.

Variance

The difference between the budgeted amount

of an item of income or expenditure in an

accounting period and the actual amount.

Write-off

An adjustment made in the accounts to reflect

a reduction in the value of, or loss of, an asset.