Understanding these abbreviations and acronyms is not only crucial for exams but also for practical application in the accounting profession. For instance, when analyzing a company’s financial health, you might look at the D/E ratio to assess its leverage or the ROE to evaluate profitability. Similarly, understanding IFRS is essential for preparing financial statements that comply with international standards. Financial stability hinges on the proper handling of both accounts payable vs. notes payable. A high AP balance may signal poor cash flow management, making it harder to secure favorable supplier terms. On the other hand, missed NP payments can lead to default, legal consequences, and additional interest costs.

DI- Deferred Income

• They are usually issued for buying property, plant, costly equipment and/or obtaining long-term loans from banks or other financial institutions.
• Notes payable, a long-term liability, requires the issuer/borrower to pay interest.
• The account abbreviation may also refer to a specific contract between two businesses.
• This method is commonly used by smaller companies as well as people who want to manage their personal finances.
• CMA (Certified management accountant) – A designation awarded by the Institute of Management Accountants to individuals who have met specific requirements in management accounting.
• The rules that all accountants are required to abide by while performing different acts of accounting.

Year-end (Y/E), as its name suggests, signifies the end of a fiscal year, which may not align with the calendar year due to different fiscal practices across various businesses. Variable expenses are costs that change in direct proportion to the output volume or activity level. Real Estate Investment Trusts (REITs) own, operate, or finance income-generating real estate projects across various property sectors. Profit After Tax(PAT) indicates the actual profitability of the enterprise after accounting statutory obligations. Operating Expenses(OPEX) are outflows from normal business operations such as salaries, utilities, recording transactions rent, etc. The New York Stock Exchange(NYSE), one of the largest stock exchanges globally, allows investors to buy and sell shares of publicly held companies.

What Does a Business Development Manager Do?

Additionally, it refers to a company’s liquid capital that can be used by the owner to pay for everyday or Outsource Invoicing ongoing expenses. Structuring debt covenants around key financial metrics, like maintaining a low debt-to-equity ratio during growth, helps ensure financial discipline and risk control. This approach prevents over-leveraging, keeps debt levels manageable, and supports long-term stability. It encourages regular monitoring of finances, helping the company stay on track for sustainable growth and easier access to favorable financing terms in the future.

Earnings Per Share (EPS)

On April 1, Company A borrowed $100,000 from a bank by signing a 6-month, 6 percent interest note. Below is how the transaction will appear in Company A’s accounting books on April 1, when the note was issued. Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own.

Applies to:

• DBA (Doing business as) – A term used to indicate that a company operates under a name other than its legal name.
• By anticipating revenue dips, organizations can avoid piling up invoices during slower periods, all while maintaining good supplier relationships.
• What makes an accurately documented journal entry consists of the correct date, the sums to be debited and repaid, a description of the transaction, and a unique reference number.
• Rasmussen University may not prepare students for all positions featured within this content.
• For accounts payable, a company receives goods or services and owes money to suppliers for them, usually based on the invoice terms.
• GS (Government securities) – This accounting abbreviations list entry denotes a type of investment issued by the United States government.

In legal terms, a Certificate of Incorporation(CI) is a license granted by the state government giving birth to the corporation under specifically defined rules described within the certificate. Shortened as CGT, Capital Gains Tax implies the tax levied on the profit realized from the sale of property or investment. In U.S. taxation law, controlled Foreign Corporations (CFCs) are foreign corporations with more than 50% of control lies with U.S. shareholders. Credit Default Swaps(CDS) are financial instruments used as a hedge and speculation against debt default. Balance Rate(BR), or interest rate, signifies the percent charged when you borrow money/ earned when you deposit money into saving accounts. Balance Of Payments(BOP) mirrors records matching all economic transactions, especially imports & exports between residents(including government) vs non-residents within a specified period.

He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University. The face of the note payable or promissory note should show the following information. The following entry is required at the time of repayment of n/p meaning in accounting the face value of note to the lender on the date of maturity which is February 1, 2019. National Company must record the following journal entry at the time of obtaining loan and issuing note on November 1, 2018. An interest-bearing note is a promissory note with a stated interest rate on its face. This note represents the principal amount of money that a lender lends to the borrower and on which the interest is to be accrued using the stated rate of interest.

BAC – Bank of America Corporation

Automating a three-way matching process eliminates the need for time-consuming manual checks, reduces human errors, and speeds up the resolution of disputes. According to a QuickBooks survey, 72% of mid-sized suppliers said late invoice payments hindered their growth. Additionally, 65% of businesses reported spending nearly 14 hours chasing late payments. Notes payable involve a legally binding promissory note, which outlines repayment terms, interest, and sometimes collateral. Venture Capital (VC) refers to investment funds investors provide to startups or small businesses with long-term growth potential. Property, Plant, and Equipment (PP&E), or fixed assets, are tangible items of substantial value owned by a company that are used in its operations for more than a year.