The time frame for which a business prepares its accounts, used to measure financial performance and position.
An accounting period is a standardized time frame for tracking and reporting a company's financial performance and tax obligations. Commonly used in financial statements, accounting periods are vital for consistency and comparison.
The Accounting Reference Date (ARD), also known as the reporting date, signifies the end of an accounting reference period, such as a financial year, for a company. It is essential for preparing financial statements and other required reports.
Accrued income, also known as accrued revenue, is income that has been earned during an accounting period but has not yet been received by the end of the period. It adheres to the accruals concept and is vital for accurate financial reporting.
Adjusting entries are critical for ensuring that financial statements reflect accurate and relevant financial information. They are posted to the accounting records at the end of an accounting period to correct any transactions or events that were not properly recorded during the accounting period.
Appraisal is a method of depreciation that values an asset at the beginning of an accounting period and again at the end. Any diminution in value is charged as an expense to the profit and loss account.
The balance sheet, also known as the statement of financial position, is a vital financial statement that outlines a company's total assets and liabilities at a specific point in time, providing a snapshot of its financial health.
A bar chart, also known as a bar diagram, is a graphical representation of statistical data using rectangular bars with lengths proportional to the values they represent.
The chargeable account period, often refered to as the accounting period, is the specific time duration under consideration for which financial transactions are recorded and financial statements are prepared.
The debit or credit balance on a ledger at the end of an accounting period, which will appear on the balance sheet at that date and be carried forward to the next accounting period.
Final entries made at the end of an accounting period to close off the income and expense ledgers to the profit and loss account.
The value and quantities of stock in trade at the end of an accounting period, used in determining the cost of goods sold during that period.
Closing stock refers to the inventory remaining within an organization at the end of an accounting period, including raw materials, work in progress, or finished goods. It plays a crucial role in determining the profitability and financial status of a company.
A continuous audit is an in-depth examination of financial records conducted on a recurring basis throughout the accounting period, aimed at detecting and correcting mistakes and improper accounting practices before the reporting year-end.
The Cost of Goods Manufactured (COGM) represents the total production cost of finished goods transferred from a production facility to inventory over an accounting period.
An item of expenditure incurred in an accounting period but, under the accruals concept, not matched with the income it will generate. Instead of being treated as an operating cost for that period, it is treated as an asset with the intention of treating it as an operating cost to be charged against the income it will generate in a future period.
Depreciation is a measure of the decrease in value of tangible fixed assets during a given accounting period, reflecting wear and tear, obsolescence, or reduction in useful economic life. It can be relevant for both accounting and currency valuation contexts.
A method for accounting for bond premiums or discounts.
End-of-Year (EOY) represents the completion of the accounting period, typically the fiscal year, where businesses close their books and prepare year-end financial statements and reports.
A financial period, also known as an accounting period, is a specific timeframe within which financial performance is measured and reported for both businesses and individuals. This span is essential for preparing periodic financial statements and evaluating profitability, financial position, and cash flows.
An in-depth overview of the financial year, including definitions, examples, related terms, online resources, and suggested reading materials.
A fiscal tax year is a 12-month period used by businesses and organizations for accounting and taxation purposes. Unlike the calendar year, it does not necessarily end on December 31.
A fiscal year is a 12-month period used for calculating annual financial statements in businesses and other organizations. The start and end dates of a fiscal year can vary between countries and organizations.
Gross corporation tax is the total amount of corporation tax payable on the profits chargeable to corporation tax for an accounting period, calculated before deduction of any income tax suffered on investment income.
In accounting, income accounts refer to revenue and expense accounts that reflect transactions affecting profit or loss during the accounting period. Unlike balance sheet accounts, income accounts provide insight into the organization's operational performance.
A journal entry is a detailed record of a business transaction in accounting, consisting of debits and credits and supporting a specific accounting period.
The balance brought forward at the beginning of an accounting period. Opening balances may be on the debit or the credit side of a ledger.
Opening Stock represents the inventory held by an organization at the beginning of an accounting period, including raw materials, work in progress, and finished goods. It plays a crucial role in assessing the financial performance and stock levels of a company.
An interval of time that can be as long or short as fits the specific situation.
The time span over which financial activities and statements are assessed, often corresponding to an accounting period.
Periodic stocktaking, also known as periodic inventory, refers to the counting or evaluating of stock held by an organization at the end of an accounting period. This process involves recording the physical number of goods on hand and is essential for determining accurate inventory levels and ensuring proper financial reporting.
A Profit and Loss Statement (P&L) summarizes the revenues, costs, and expenses incurred by a company during an accounting period, offering a comprehensive view of its financial performance. Also known as an Income Statement, operating statement, statement of profit and loss, or income and expense statement.
A financial estimate calculated to cover debts deemed uncollectable during an accounting period. It distinguishes between general and specific provisions based on the likelihood of debt recovery.
A trading loss arising in a current accounting period as a result of computing the profits and losses of an organization in accordance with accepted corporation-tax principles.
The reporting date is the specific point in time at which an organization closes its books for an accounting period, summarizing financial activities over that period for reporting purposes.
Revenue expenditure refers to the costs that are immediately written off to the income statement in the accounting period in which they are incurred. These expenditures are associated with the revenue generated within the same period.
A scheme for the self-assessment of tax by companies introduced in the UK for all companies with an accounting period ending after 1 July 1999. This includes the timely submission of tax returns and payment of tax liabilities.
The sum-of-the-digits method is a technique for calculating the depreciation of a fixed asset, where the majority of the depreciation is recognized in the early years of the asset's life.
The span of time covered by a value added tax (VAT) return, usually encompassing three calendar months. VAT returns must be completed and submitted to HM Revenue and Customs within one month following the end of this tax period.
A tax year is a period used for calculating annual income tax returns. It is commonly a calendar year but can also be a fiscal year, which is any consecutive 12-month period that does not necessarily start on January 1st.
Total income refers to the income of a taxpayer from all sources before any income-tax allowances are applied. This is often referred to as statutory total income and includes income calculated on various bases depending on the source of income. This concept is pivotal for calculating a person's income tax for a given year.
A financial statement displaying the wealth created by a company through the collective efforts of capital, employees, and others, along with its allocation over an accounting period.
A year is traditionally understood as a period of time consisting of 365 days, or 366 days in a leap year, which represents one complete orbit of the Earth around the Sun.
Year-end refers to the end of an accounting period, which may align with the calendar year or a fiscal year, and is a pivotal moment when financial books are closed.
