SWIFT (The Society for Worldwide Interbank Financial Telecommunication) – A consortium of banks that operates a global network for exchanging financial messages. R&D (Research and development) – The process of designing, testing, and creating new products or services. PP&E (Property, plant, and equipment) – Company’s physical assets used to produce products or provide services. PA (Another public accountant acronym) – A licensed person practicing accounting in the US. M&A (Mergers and acquisitions) – The process of buying, selling, or combining businesses.
P&L: Profit & Loss Statement
- Accounting cycles track accounting activities—all within unique accounting periods—from when the transactions first occur to when they conclude.
- DAR (Director and officer liability insurance) – Insurance that protects the company’s directors and officers from personal financial losses if they are sued for wrongful decisions or actions.
- Federal Deposit Insurance Corporation(FDIC), offers insurance cover on bank deposit accounts to reassure trust and encourage stability within the financial system.
- With the advent of technology, there has been a constant focus on the automation of the accounts payable (AP) process.
- It is mostly calculated by using the numbers from a short-period (typically one year or less) operating result of the entity and, therefore.
In the accounting abbreviation, GL refers to the complete record managed for the company’s financial transactions. HEPS (Headline earnings per share) – A measure of a company’s profitability that considers all of its earnings, including those not from continuing operations. While accounting is all about numbers, they are not the only thing that matters to keeping your books in order. So, let’s take a break from the numbers and look at some letters known as accounting abbreviations. We’ve listed the most important ones and some helpful financial glossary below to help you stay on top of your accounting operations. When you procure needed supplies using financing and ensure an effective budgetary process through P2P, you immediately see higher cash flow stability and lower costs.
Basic accounting acronyms and abbreviations to know
This metric is crucial in determining whether future earnings may justify potential investments. Operating Cash Flow(OCF) refers to the total cash generated by a company’s regular business operations. Management’s Discussion and Analysis (MD&A) is a section in a company’s annual report wherein management discusses various aspects of the company’s financial performance. Expenses(EX/EXP) are costs incurred during business operations, subtracted from revenues to determine net income. Disclosure(DISC), in a financial context, means providing investors with all significant information influencing investment decisions. At the same time, Discontinued Operations represent financial results separate from continuing operations when parts of Liability Accounts the business have been sold off/disposed of.
ASC – Accounting Standards Committee
CFC (Controlled foreign corporation) – This term on our accounting abbreviation list refers to a foreign corporation controlled by US shareholders and subject to US taxation. AVA (Asset value adjustment) – A non-cash adjustment to a company’s balance sheet used to reflect the estimated fair value of its assets. AR (Accounts receivable abbreviation) – An asset account on a company’s balance sheet representing money the company is owed by its customers.
Variable Cost – VC:
Working alongside field experts in various industries and company sizes, Team MHC has garnered impressive thought leadership knowledge that we are excited to share with our readers. In this article, we define accounts payable and notes payable, outline the main distinctions between the two, and provide some tips on how to better manage accounts payable. IS (Income statement) – The income statement abbreviation expresses the financial paper, which reveals the incomes and expenses of a business at a specific time. EPS (Earnings per share) – A measure of a company’s financial performance that considers the number of shares of common stock outstanding. DR (Derivative) – This is one of the accounting abbreviations describing a financial instrument that derives its value from the performance of another asset or group of assets.
Or, they may be variable, meaning they can fluctuate based on changes in market interest rates. Interest rates on notes payable depend on factors like creditworthiness and loan duration, and can be fixed or variable. Notes payable are liabilities and represent amounts owed by a business to a third party. What distinguishes a note payable from other liabilities is that it is issued as a promissory note. You create the note payable and agree to make payments each month along with $100 interest.
- This is a detailed guide on how to calculate Net Profit Margin ratio (NPM) with thorough interpretation, analysis, and example.
- M&A (Mergers and acquisitions) – The process of buying, selling, or combining businesses.
- GDP (Gross domestic product) – A measure of a country’s economic output that considers the value of all goods and services produced within the country.
- We will define and contrast accounts payable and notes payable and illustrate how financing strategies offer maximum growth opportunities when paired with a dynamic procurement management tool.
- An Initial Public Offering(IPO) refers to the process by which a privately held company becomes publicly traded on a stock exchange.
- They might also refinance or restructure debt to get better terms or free up cash flow.
Common Audit Acronyms and Definitions
The purpose of issuing a note payable is to obtain loan form a lender (i.e., banks or other financial institution) or buy something on credit. The lender may require restrictive covenants as part of the note payable agreement, such as not paying dividends to investors while any part of the loan is still unpaid. If n/p meaning in accounting a covenant is breached, the lender has the right to call the loan, though it may waive the breach and continue to accept periodic debt payments from the borrower. The agreement may also require collateral, such as a company-owned building, or a guarantee by either an individual or another entity.
The Accounting Standards Committee (ASC) is responsible for creating, reviewing, and updating the standards by which financial transactions are recorded and reported. Asset Under Management (AUM) is a financial term signifying the total market value of all investment funds managed by a portfolio manager or investment company. Asset-backed securities (ABS) are financial products backed by a Accounting Periods and Methods loan, lease, or receivables against assets other external to real estate and mortgage-backed securities. These abbreviations encapsulate complex concepts in short, memorable forms and are essential for anyone involved in accounting or finance.
The Consumer Price Index (CPI) measures average changes in prices consumers pay for a ‘standard’ package of goods and services over time. A Corporation (CORP) is an organization, often comprising multiple businesses, authorized by law to act as a single entity and recognized. Also called C.I.F., this term represents the selling price inclusive of the cost of freight & insurance charges paid by the seller upon transporting goods via sea route.