C – Accounting Glossary
Cash-basis accounting records financial events based on cash flows. For example, when you pay your rent your landlord would record an income event when you make the payment. The landlord records an expense event when he pays the rental agent their fee for your apartment. It is the accounting method used by most individuals, and by some businesses that have limited payables or receivables or whose income and expense cash flows are closely associated with each other in time.
Cash flow statement
A cash flow statement is a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). It does not include non-cash items such as depreciation. This makes it useful for determining the short-term viability of a company, particularly its ability to pay bills.
Certified Public Accountant
Certified Public Accountants (CPAs) are accounting professionals of the United States who have passed the Uniform CPA exam, which was developed and is maintained by the American Institute of Certified Public Accountants (AICPA), and have subsequently met additional state requirements for licensure as a CPA. Only CPAs are professionally licensed to provide to the public, attestation (including auditing) opinions on publicly disseminated financial statements.
Common Stock, also referred to as Common shares, are, as the name implies, the most usual and commonly held form of Stock in a corporation. The other type of shares that the public can hold in a corporation is known as Preferred Stock. Common stock that has been re-purchased by the coporation is known as Treasury stock and is available for a variety of corporate uses.
The process of tracking, recording and analyzing costs associated with the activity of an organization, where cost is defined as ‘required time or resources’. Costs are by convention measured in units of currency.
Cost of goods sold
In accounting, the cost of goods sold describes the direct expenses incurred in producing a particular good for sale, including the actual cost of materials that comprise the good, and direct labor expense in putting the good in salable condition. Cost of goods sold does not include indirect expenses such as office expenses, accounting, shipping department, advertising, and other expenses that can not be attributed to a particular item for sale.
Creative accounting refers to accounting practices that deviate from standard accounting practices. They are characterized by excessive complication and the use of novel ways of characterizing income, assets or liabilities.
Refers to that part of double entry bookkeeping that mirrors debits.
A current asset is an asset on the balance sheet usually lasting less than one year such as accounts receivable, prepaids, cash, etc.
current liabilities are considered debts of the business that are due within the fiscal year.