ERP Accounting term

The following accounting term will seems very easy for some but for technical guys its very helpful to understand ERP term ...try this

Accountant - a qualified person who is skilled at managing and analysing business financial records.
Asset - Any type of property; anything that adds value. The assets of a business are money in the bank, accounts receivable, securities held in the name of the business, property or buildings, equipment, fixtures, merchandise for sale or being made, supplies and all things of value that the business owns.
Authorised capital - the total amount of capital which a company, by its memorandum of association, is authorised to offer for subscription. See also, paid up capital.
Balance sheet - A financial statement about a business at a particular point in time. It lists the business assets, liabilities and proprietorship.
Breakeven point - the point at which volume of sales is enough to cover all costs.
Budget - an estimate of expenses and revenue required.
Budgeting - Planning the expected revenue and expenditure of a business for a given period.
Capital - the total owned and borrowed funds in a business.
Capital expenditure - Money spent in purchasing an asset.
Cash flow - the flow of internal funds generated within the business as a result of receipts from debtors, payments to creditors, drawings and cash sales.
Cashflow projection/ cash budget - How much cash your business needs to generate to cover all costs and make an acceptable profit.
Company - a business owned by a group of people called shareholders, which has its own legal identity separate from its owners.
Compliance - procedures that are undertaken at regular intervals or on an ongoing basis to ensure that the regulations and/or laws laid down by an authoritative body are kept.
Controllable expenses - those expenses that can be controlled or restrained by the businessperson.
Cost of goods sold - the total cost to the business of the goods sold during an accounting period. In its simplest form this is the sum of the opening stock plus all purchases less the closing stock.
Creditor - a person or business to which money is owed.
Current assets - includes cash, short-term deposits, customers’ accounts, stock (includes work in progress, raw materials and finished goods), that will be converted into cash during the normal course of business, within a year.
Current liabilities - short-term debts such as bank overdraft, creditors and provisions set aside to pay taxation and other commitments (for example, holiday or long service leave) and expected to come due within one year of the Balance Sheet.
Debt - that which is owed. If you borrow money, buy something on credit or receive more money on an account than is owed, you have a "debt.
Debt capital - money from external sources used to finance a business. See also equity capital.
Debtor - a person or business who owes money.
Depreciation - Loss in value of assets over time.
Depreciation expense - gradual reduction of the value of a fixed asset and gradual application of this cost to the expenses of a business over the useful life of the asset.
Depreciation schedule - a table showing depreciable assets, the year each was purchased, its cost, the percentage by which it is depreciated each year and written down current value.
Direct costs - the costs incurred, in addition to fixed costs, as a result of manufacturing a product or providing a service. Direct costs are made up of direct material, direct labour and direct manufacturing or servicing costs.
Dividend - a distribution of the profits of a company among its members or shareholders.
Drawings - withdrawals of assets (usually cash) from a business by a sole proprietor or a partner. Enterprise - When used generically, an enterprise is defined as the aggregate of all functional elements participating in a business process improvement action regardless of the organisational structure housing those functional elements.
Entity - an individual (sole trader), partnership, a body corporate, a corporation, an Incorporated association or body of persons, a trust or superannuation fund.
Equities - stocks and shares invested in a business and not bearing fixed interest.
Equity capital - money provided by the business owner/s to finance the business.
Expenses - costs incurred by a business in earning income, for example, rent, advertising, wages etc. Finance - The short term funds required for the day to day operation of the business, and the capital funding from various sources required for the longer term financing of the organisation.
Financial statements - formal reports prepared from accounting records describing the financial position and performance of the business.
Fixed assets - the land, buildings, vehicles, materials and equipment owned by a business, which are used to earn revenue rather than being for sale.
Fixed costs - Costs which remain constant whatever the level of business activity. Rent, for example, must be paid whether or not any business is accomplished.
Goodwill - the excess price asked for the sale of a business over the value of its physical assets; an intangible asset, the price of which represents a payment for the existing client base and future profits.
Gross profit - the excess of net sales over cost of goods sold usually expressed as a percentage.
Income - money that is being earned by the business.
Income statement - a financial document that shows how much money (sales) came in and how much money (costs) was paid out. Subtracting the costs from the sales gives you your profit and all three are shown on the income statement.
Intangible assets - those assets of a business, which cannot be assigned a firm, fixed value, such as leases, franchises, goodwill and patent rights.
Inventory - the value of all the stock of physical items that a business uses in its production process or has for sale in the ordinary course of doing business.
Joint Venture - A form of strategic alliance in which a business is owned jointly by two or more independent firms that continue to function separately in all other respects but pool their resources in a particular line of activity.
Key performance indicators (KPIs) - Criteria used for measuring essential tasks and skills involved in a job to assess how well it is being performed.
Limited partners/partnership(s) - a legal partnership where some owners are allowed to assume responsibility only up to the amount invested.
Liquidate - to settle a debt or to convert to cash. This literally means to do away with.
Liquidation - The sale of the assets of a portfolio company to one or more acquirers when venture capital investors receive some of the proceeds of the sale.
Loan/(s) - The advance of a specified sum of money to a person or business (the borrower) by other persons or businesses, or more particularly by a specialist financial institution (the lender), which makes its profits from the interest charged on loans.
Margin - the difference between the selling price and the purchase price of an item usually expressed as a percentage of the selling price.
Compare mark-up. Mark-up - the price increase between buying at wholesale and selling at retail often expressed as a percentage of the wholesale or cost price.
Merchandise - goods that may be sold or traded.
Net - what is left after deducting all charges (see gross).
Net profit - the remainder after all expenses of an accounting period are deducted from all revenue of the same period.
Net worth - the owner/s’ interest in a business, calculated by subtracting all liabilities from the assets of the business.
Non-profit or not-for-profit business - A business that does not operate for the profit or gain of its individual members.
Operating expense - all the expenses normally incurred in running a business, during an accounting period, excluding the cost of goods sold.
Overdraft - a form of loan by which a person with a trading bank current account is given permission to continue making drawings on the account up to an agreed limit, after the balance has been reduced to nil. Overhead(s) - expenses which are incurred in producing a commodity or rendering a service, but which cannot conveniently be attributed to individual units of production or service. Examples are heating, lighting etc.
Paid-up-capital - the total capital of a company. It comprises both shares issued for cash or for acquisition of assets and bonus shares.
Partnership(s) - a legal business relationship of two or more people who share responsibilities, resources, profits, and liabilities.
Personal assets - the money you have in the bank, whatever is owed to you, any securities (shares) that you own, the property you own, whatever part of your home that you own, your furniture and appliances and all the miscellaneous things that you personally own.
Price - Something of value that is exchanged for something else.
Principal - in the case of a loan, refers to the actual amount borrowed and on which interest is paid. Private equity – Includes all non-public equity and hybrid instruments: business angel capital, venture capital, management buy-outs, management buy-ins, and mezzanine arrangements.
Profit - total revenue less total expenses for a period of time calculated in accordance with generally accepted accounting principles.
Profit and loss statement - statement of revenue and expenses showing the profit or loss for a certain period of time.
Profit margin - the amount that the price of a product or service is raised above its cost in order to provide a gross profit.
Proprietary company - a business which is owned by not less than two persons and not more than 50 persons and which restricts the right of the shareholders to transfer shares. Such a business is a separate legal entity and must use the words Proprietary Limited (Pty Ltd) after it name.
Proprietorship - the value of the proprietor’s assets in a business less any external liabilities.
Rate of stock turnover (stock turn) - the ratio of cost of goods sold over average stock (at cost). This indicates how many times, on average, the entire inventory (stock) was sold and replaced during the year. Receivership - the legal condition a company is placed in when an official receiver is appointed to investigate and manage its affairs.
Return on investment (ROI) - the ratio of net profit after income tax, over owner’s equity. Usually expressed as a percentage.
Sales - the total value of goods sold or revenue from services rendered.
Secured - protected or guaranteed as in the case of a loan where the lender holds the title of some asset until the borrower has repaid the loan in full.
Selling - The act of disposing of a product in exchange for money.
Sole trader - a person who trades by himself/herself without the use of a company structure or partners and bears alone full responsibility for the actions of the business.
Solvent - the condition of a business when all debts can be paid as they come due.
Stakeholders - All those who have an interest in an organisation, its activities and its achievements. These may include customers, partners, employees, shareholders, owners, government, and regulators.
Stock - Items produced, manufactured, acquired or purchased by a business for manufacture, sale or exchange. (physical items (inventory) that a business uses in its production process or has for sale in the ordinary course of doing business).
Tangible asset - something substantial or real that is capable of being given an actual or approximate value. Term loan - a loan for a fixed period of more than one year and repayable by regular instalments.
Trade credit - an arrangement to buy goods or services on account, that is, without making immediate cash payment.
Trade discount - an allowance made by a seller to a buyer at the time of purchase, for the deduction of a percentage of the price, provided the payment is made within agreed terms.
Trial balance - a list of all balances in the ledger at a given time.
Turnover - The amount of money that passes through a business during a financial year.
Under-capitalisation - insufficient investment of funds in a business.
Unit Cost - The total costs in resource and material to produce one instance of a product or service. Unsecured loan - a loan that is not backed up by any collateral, such as a home or an automobile offered as security.
Value - Worth, desirability or utility. Usually, determined as a Balance between different characteristics (such as price and benefits).
Variable Cost(s) - Costs which vary in direct relation to the production of goods or services. Variable costs go to zero if the activity stops.
Working capital - Liquid funds available to the business represented by current assets, less current liabilities. (the excess of current assets over current liabilities of any business at any time)