Accounting Vocabulary: English Terms for Accountants

defray verbC1

To provide money to meet part or all of a cost.

A modest recharge to the subsidiaries helped defray the cost of the shared finance team.

disclaim verbC1

To formally refuse to accept responsibility for or express a view on something.

Unable to verify the inventory, the auditor disclaimed an opinion on the accounts.

falsify verbC1

To alter records or information in order to deceive.

The branch manager falsified stock counts to hide mounting shortages.

fudge verbC1

To present figures in a vague or misleading way to hide an unwelcome truth.

The division head was accused of fudging the forecasts to hit his bonus target.

liquidate verbC1

To wind up a company by selling its assets to pay its debts.

Creditors voted to liquidate the retailer after rescue talks collapsed.

undervalue verbC1

To assign a lower value to something than it is really worth.

Critics claimed the land had been undervalued to keep the tax charge down.

amortisation nounC1

The systematic writing-off of the cost of an intangible asset over its useful economic life.

The amortisation of the acquired patent is charged evenly across its ten-year legal term.

apportionment nounC2

The distribution of a shared cost among departments or periods on a rational basis.

The apportionment of factory rent was based on the floor space each division occupied.

chart of accounts nounC1

The structured list of all the ledger accounts a company uses to record its transactions.

Before we migrate to the new system, we need to tidy up the chart of accounts and merge the duplicate codes.

codification nounC1

The consolidation of scattered accounting rules into a single organised body.

The codification gathered decades of guidance into one searchable framework.

comptroller nounC2

A senior official responsible for overseeing financial accounts and controls, especially in government.

The comptroller refused to release the funds until the department explained the overspend.

concurrence nounC1

A second partner's independent agreement with the conclusions reached on an engagement.

For listed clients, an engagement-quality reviewer must signal concurrence before the opinion is released.

curtailment nounC1

A reduction or scaling back of a plan, benefit, or level of activity.

Management modelled the cost curtailment needed to hit the revised margin target without closing the plant.

deferred revenue nounC1

Money received in advance for goods or services not yet delivered, recorded as a liability until earned.

The annual subscriptions sit in deferred revenue and we release them to income month by month.

denominator nounC2

The chosen level of activity over which fixed overhead is spread to derive a unit rate.

Choosing budgeted rather than practical capacity as the denominator quietly padded every unit's absorbed cost.

derecognition nounC2

The removal of a previously recognised asset or liability from the balance sheet.

Transferring substantially all the risks of the receivables permitted their derecognition.

disbursement nounC1

The paying out of money, especially from a fund or on behalf of a client.

The solicitor's bill listed the fee separately from disbursements such as court charges.

dormancy nounC1

The state of being inactive, especially of a company or account that is not trading.

The subsidiary qualified for audit exemption during its period of dormancy.

EBITDA nounC1

Earnings before interest, tax, depreciation and amortisation, used as a proxy for operating profitability.

Investors focus on EBITDA because it strips out financing and accounting choices to show the core performance.

falsification nounC1

The deliberate alteration of records or data to mislead.

Forensic accountants uncovered systematic falsification of the expense claims.

lapping nounC1

A fraud in which a receipt from one customer is used to conceal the earlier theft of another customer's payment.

The overdue-account pattern was a classic sign of lapping in the accounts-receivable function.

offsetting nounC2

The presentation of an asset and a liability net against each other on the face of the accounts.

The standard prohibits offsetting unless a legal right of set-off genuinely exists.

on-cost nounC1

An additional cost incurred on top of a basic wage or expense, such as employer contributions.

The labour rate looked cheap until you loaded the employer on-costs of pension and national insurance.

onerous contract nounC1

A contract whose unavoidable costs of meeting its obligations exceed the economic benefits expected to flow from it.

Once freight rates collapsed, the shipping commitment turned onerous and we booked a provision for the full expected loss.

perpetuity nounC1

A stream of identical cash flows assumed to continue indefinitely.

The terminal value was estimated by treating the final year's cash flow as a perpetuity.

pervasiveness nounC2

The extent to which a problem affects the financial statements as a whole.

Given the pervasiveness of the missing records, the auditor issued a disclaimer of opinion.

rectification nounC1

The act of correcting an error or defect.

The rectification of the posting errors delayed the quarter-end close by a week.

stratification nounC1

The division of a population into sub-groups so that each can be tested at an appropriate level of scrutiny.

Stratification of the debtor ledger isolated the few large balances that warranted individual confirmation.

sundries nounC1

Various small items or expenses grouped together because they are too minor to list separately.

The auditor asked why sundries had tripled when every other cost line was flat.

trial balance nounC1

A listing of all ledger balances used to check that total debits equal total credits before preparing accounts.

The trial balance doesn't balance, so there's a posting error somewhere we need to track down.

vouching nounC1

The audit technique of tracing a recorded entry back to its supporting source document to confirm the transaction occurred.

We vouched a sample of December invoices to signed delivery notes to test for cut-off errors.

wastage nounC1

The loss of materials through spoilage, scrap, or evaporation during production.

The standard cost built in a small allowance for wastage, but actual scrap ran well above it.

contra adjectiveC2

Describing an account whose balance offsets that of a related account.

Accumulated depreciation is a contra account set against the cost of the asset.

encumbered adjectiveC2

Of an asset, subject to a charge or claim that restricts its use or sale.

Most of the property portfolio was encumbered as security for the bank facility.

immaterial adjectiveC1

Too small or insignificant to affect the overall picture.

The unrecorded accrual was judged immaterial and left uncorrected.

imputed adjectiveC2

Assigned as a notional cost or value rather than actually paid.

An imputed interest charge was levied on the capital tied up in each division's inventory.

substantive adjectiveC1

Relating to audit procedures designed to detect material misstatements in account balances or transactions.

Because controls were deemed unreliable, the auditors expanded their substantive testing of revenue.

sundry adjectiveC1

Describing miscellaneous items of minor individual value that are grouped together.

Small unclassified receipts were posted to a sundry income account.

unmodified adjectiveC1

Of an audit opinion, issued without any qualification or reservation.

After a difficult year the group was relieved to receive an unmodified opinion.

materially adverbC1

To a degree significant enough to influence decisions.

The auditors concluded that the error did not materially affect the reported profit.