Glossary of 100 Best Accounting Terms

Accounting terms and Finance,Small dictionary of accounting and financial terms.We have collected 100 PRACTICAL BASE ACCOUNTING  TERMS FOR STUDENTS

• Action:
• It represents the portion of a certain fraction of the capital of a corporation (open or closed), which may be preferred or ordinary. Preferred shares are those that the holder has the right to receive a fixed percentage of profits before the distribution of dividends, for giving up the directive prerogatives. Ordinary shares are those that grant owners the right to participate in the appointment of members of the executive board, on the other hand, they are only entitled to the distribution of dividends after the priority percentage of the holders of preferred shares.

• Majority shareholder:
• It is the individual or legal entity that holds more than half of the shares of a public limited company (open or closed) and therefore is the shareholder of the same. Another way of defining it is when a given individual shareholder has a higher percentage than any other.

• Minority shareholder:
• It is any holder of shares in a public limited company (open or closed) that is not a majority shareholder.

• Amortization:
• It is the account that records the decrease in the value of intangible assets recorded in permanent assets, that is, the loss or consumption of capital applied in the acquisition of industrial or commercial property rights and any others, with a limited duration.

• Horizontal analysis:
• It seeks to demonstrate the evolution over the subsequent years, with the oldest year as a basis for comparison which is base 100 (ie 100%).

• Vertical analysis:
• Its objective is to demonstrate the participation of each account in relation to the total assets or liabilities, as the case may be. In terms of income accounts (income and expenses), the comparison is made by comparing each account in relation to net operating income (ie gross income less deductions from returns and taxes).

• Active:
• They are all assets, rights and values ​​receivable from an entity. Asset accounts are accounts of a debtor nature, with the exception of rectifying accounts (such as accumulated depreciation and provisions for adjustment to market value).

• Current assets:
• Cash on hand or in banks, goods, rights and values ​​receivable within a maximum period of one year, that is realizable in the short term (duplicates, inventories of goods produced, etc.), investment of resources in expenses for the following year.

• Deferred charges:
• Subgroup of permanent accounts that show the resources invested in the realization of expenses that, since they contribute to the formation of the result of more than one future fiscal year, are only appropriated to the income accounts to the extent and in the proportion in which this contribution influences the generation the result of each exercise.

• Active permanent:
• Group of accounts that include resources invested in all assets or rights of extended stay, intended for the normal functioning of the company and its enterprise, as well as the rights exercised for that purpose. Permanent assets are composed of 3 subgroups:
  Investments, fixed assets and deferred charges.

• Swing:
• It is a table (map, graph, etc.) showing the economic / financial situation of the company or entity on a given date. It is commonly said that it is a static radiography at a given moment in the equity of a company or entity. The balance sheet assesses wealth, that is, the value of the company, but it does not show its results, it only presents it in full value, and its statement is made in another document called the income statement. The balance sheet consists of two parts, which are always in balance. The asset is equal to the liability plus the shareholders’ equity.

• Balance sheet:
• It is the financial statement intended to show, qualitatively and quantitatively, on a given date, the entity’s financial and equity position.

• Assets:
• It is everything that is capable of satisfying human needs, and that is also susceptible to economic evaluation.

• Consumer goods:
• In the business environment, they are non-durable or that are spent or consumed in the production process, since after consumption, they represent expenses, such as:
  Fuels and lubricants, office supplies, cleaning supplies, etc. In society, in general, subsistence and / or personal use items are considered, such as food, clothing, personal hygiene, etc.

• Income assets:
• Not intended for company purposes, such as real estate for rent or rent.

• Fixed or fixed assets:
• They are those that represent durable goods, with a useful life of more than 1 year, such as:
  Real estate , vehicles, machines, facilities, equipment, furniture and utensils.

• Intangible assets:
• They do not have physical existence, however, they represent an investment of capital indispensable to the objectives, such as:
  Trademarks and patents; formulas or manufacturing processes; Copyright; authorizations or concessions; commercial point; trade fund; improvements to third party properties; research and development of products / services; cost of technical projects, pre-operating, pre-industrial expenses, organization, reorganization, restructuring or remodeling of the company or entity.

• Production capacity:
• It is directly related to the use made of the company’s production structure. Thus, in the case of multi-producer companies, there will be as many levels of activity (which are partitions of total capacity) as there are possible combinations of the product mix (since each of the goods or services generated uses, in a more or less differentiated way , the means of production available). On the other hand, the unification of production will allow the definition of individualized and homogeneous capacities for the various operations carried out by a company or entity, which will facilitate and / or enable general, specific and comparative analyzes of performance between the production units.

• Open capital:
• Prerogative of public limited companies to trade shares on the stock exchanges, raising funds through the capital market

• Working capital:
• Name given to the values ​​comprised by current assets, namely:
  Cash + receivables + inventories + other assets and rights due up to one year after the balance sheet date.

• Own working capital:
• Difference obtained between current assets and current liabilities. Financial management must be exercised over this, as debts affect the profitability provided by the goods and rights arising from sales.

• Third party capital:
• They represent resources originating from third parties used to acquire assets owned by the company or entity. Corresponds to the payable liability, ie debts and obligations.

• Privately Held:
• Characteristic of companies that do not trade their shares or quotas through the capital market.

• Equity:
• These are the resources originating from the partners or shareholders of the company or entity, as well as those arising from its social operations. Corresponds to shareholders’ equity.

• Share capital:
• It is the amount provided for in the contract or bylaws, which forms the participation (in cash, assets or rights) of the partners or shareholders in the company or entity.

• Total capital available to the company:
• Corresponds to the sum of own capital and third party capital. It is also equal to the total assets of the company or entity.

• Correction letter:
• Let’s see what was published in the Official Gazette of 04 / Apr / 2007:
  1. Adjust SINIEF no. 1/2007, amending provisions of the 1970 S / N Agreement, with the institution, at the national level, of the correction letter, to be used in the settlement of errors in the issuance of tax documents.
  2. The standard provides that the correction letter cannot be used when the error to be rectified is related to:
     1. The variables that determine the value of the tax such as:
        calculation basis, rate, difference in price, quantity, value of the operation or installment;
     2. Correction of registration data that implies a change in the sender or recipient;
     3. The date of issue of the tax document or the departure of the goods or services provided.
  3. It is noted, therefore, that its use was limited and that taxpayers, in fact, will need to wait for the change in the legislation of each state to operationalize the application of the letter of correction regulated by adjustment no. 1/2007.

• Account classification:
• Accounts can be classified according to several criteria. However, here we are interested in classifying it into two groups:
  Equity (assets and liabilities) and income (income, costs and expenses).

• Account:
• It is the technical name of the components of the balance sheet, comprised of assets, rights, obligations and equity, as well as the elements of the income statement, comprised of costs, expenses and revenues

• Accounting:
• It is the science that records all administrative acts and facts, financially measurable, studies and controls the patrimony, aiming to represent it graphically; evidence its variations; establish norms for its interpretation; analysis and auditing, as well as serving as a basic instrument for decision making in all sectors directly or indirectly involved with the company or entity.

• Civil or social accounting:
• It is the one that records the activities carried out by people who do not have the ultimate goal of profit, but rather the institute of survival or social well-being.

• Private accounting:
• It deals with the study and registration of the administrative facts of persons under private law, both physical and legal, in addition to the graphic representation of their assets, dividing them into civil and commercial.

• Public accounting:
• It is concerned with the study and registration of administrative facts of people under public law and the graphic representation of their assets, aiming at three distinct systems:
  Budget, financial and equity, to achieve their objectives, branching out, according to their area of ​​expertise. coverage, in federal, state, municipal and municipalities.

• Income accounts:
• They record revenues, costs and expenses, allowing you to demonstrate the results for the year. There are profit and loss accounts that can appear in both the expense group and the revenue group. This is the case with rents, interest and discounts. The appropriate classification is due to the adjectives used in each of them. See the case of the rent account that if it is passive rent is expense or active rent is revenue.

• Equity accounts:
• They represent the assets and liabilities, that is:
  Assets, rights, obligations and / or debts and equity or equity.

• Rectifying asset accounts:
• They are those classified in assets, but because they have credit balances, they are shown with the sign (-).

• Production cost:
• It is obtained by adding the costs arising from the consumption of goods and services, such as:
  Raw material, wages and charges in the production area, depreciation and amortization of industrial machinery and equipment, as well as general manufacturing expenses, in the generation of goods and services. services sold.

• Replacement cost:
• Criteria for assessing the cost of production that takes future costs into account, not considering the historical costs of the items consumed. We can consider the English term NIFO = Next in first out, that is, the next product to enter the first to leave.

• Direct cost:
• Concept derived from the direct costing method, being that they can be perfectly identifiable in each product or service sold, in which the costs incurred directly in obtaining a good or service are observed, such as:
  Raw material and salaries of the productive area personnel.

• Fixed cost:
• Operational expenses that occur regardless of production, in other words, remain unchanged regardless of the level of utilization of their production capacity, such as:
  Fixed or monthly salary of support and management personnel, depreciation of machinery and equipment, fixed part of electricity bill. Interestingly, we can see that “the higher your production, the lower the fixed unit cost. Thus, we can say that they are:
  Variable costs per unit produced”.

• Indirect cost:
• They are those that during the production phase cannot be economically identified in each unit of the good or service produced or sold. In some cases, they may even affect directly, but they have difficulty in individualized control, having to use apportionment bases for their allocation to the product, such as:
  Rental of industrial facilities, depreciation of machinery and equipment, insurance, consumption, wages and charges of monthly payments.

• Average cost:
• Criteria for appropriation of costs admitted by Brazilian tax legislation, for the calculation of inventory costs, which must be obtained from monthly averages of exits after obtaining the previous average unit costs (inventory costs divided by quantities) plus purchases (in total quantities and values), then dividing the values ​​by the existing quantities.

• Standard cost:
• It is the early determination of product components, in quantity and value, supported by the use of data from various sources, valid for a certain period of time.

• Variable cost:
• They are characterized by expenses directly related to the production of a good or service, that is, they only occur when they are produced. As an example, they can be cited:
  Raw material and salary of the personnel of the productive area (they are usually hourly). Interestingly, we can observe that “as the name says, they vary according to production. Thus, we can say that they are:
  Fixed costs per unit produced”.

• Cost:
• These are expenses incurred with goods or services used in the production of other goods or services, expressed in monetary terms by multiplying the quantity of factors of production by the respective unit prices, such as:
  Raw material consumed in production, wages of production personnel, maintenance production machines, factory rent, electricity, etc.

• Deficit:
• Term used in finance to represent the negative balance of cash and bank financial operations. In public accounting it represents the equivalent of the loss in the private company, that is, when public expenses exceed public revenues.

• Cash flow statement (DFC):
• Lists the set of company financial inflows (receipts) and disbursements (payments) in a given period. An attempt is made to analyze every displacement of each currency unit within the company.

• Statement of accumulated profit / loss (DLPA):
• Its purpose is to demonstrate the movement of the accumulated profit or loss account, not yet distributed to the holder partners or shareholders, revealing the events that influenced the change in its balance. This statement must also reveal the dividend per share of the paid-up capital.

• Statement of changes in equity (DMPL):
• It provides the movement that occurred during the years in the component accounts of shareholders ‘equity, makes a clear indication of the flow from one account to another in addition to indicating the origin of each increase or decrease in the PL (shareholders’ equity).

• Demonstration of sources and applications of resources (DOAR):
• It aims to show, in a given period, the changes that led to changes in the net working capital of the company or entity. Another purpose is to present information related to the company’s sources (sources of funds) and investments (investments of resources) during the year and where these resources affect the company’s net working capital (CCL).

• Statement of income for the year (DRE):
• It is intended to highlight the formation of the net result for the year, comparing the income, costs and expenses determined in accordance with the accrual basis.

• Basic financial statements:
• Balance sheet; result demonstration; statements of accumulated profits or losses; statements of changes in equity; demonstrations of the origins and applications of resources; explanatory notes.

• Depreciation:
• Appropriation, at costs or expenses, in a given fiscal year arising from the use of the assets recorded in the permanent assets of the company or entity.

• Accumulated depreciation:
• It represents the wear and tear of physical assets recorded in permanent assets, due to use, natural causes or obsolescence, being considered as reducing accounts for each of the respective accounts for permanent assets.

• Discounts:
• These are expenses when granted by the company; hence discounts granted are recorded in the account. And they are revenues when obtained by the company; hence, discounts obtained

• Disbursement:
• It is the payment for a good or service purchased. It can occur before, during or after the acquisition. Thus, if we buy a cash asset, the disbursement occurs during the acquisition of this asset. If we buy a term asset, the disbursement will take place after the acquisition. If we advance the money for later receipt of the good or service, the disbursement occurs before the receipt of this good or service.

• Expenses:
• They are expenses incurred to directly or indirectly generate revenue. Expenses can decrease assets and / or increase liabilities, but always cause decreases in equity. Other nomenclatures may express the expenses and income accounts, being:
  Rent paid (or liabilities) or rent expenses (expenses).
  Rent received (or assets) or rental income (income).
  Interest paid (or liabilities) or interest expenses (expenses).
  Interest received (or assets) or interest income (income).

• Prepaid expenses:
• Comprises expenses paid in advance that will be considered as costs or expenses during the following year.
  Ex: Insurance to expire, rents to expire, experienced material and charges / interest to be appropriated.

• Deferred:
• Investment of resources in expenses that will contribute to profit in more than one fiscal year, such as:
  Research and development, pre-industrial / pre-operating expenses.

• Rights:
• They are all the values ​​that a company or entity has to receive from third parties, for example:
  Customers (or commonly called customers), being generated by credit sales or values ​​owned by the company or entity that are in the possession of third parties.

• Available:
• Comprised of immediate cash and cash equivalents, bank accounts, cash receivable checks and applications in the open market.

• Duplicate:
• Credit instrument whose settlement proves the payment of an obligation arising from the purchase of goods or receipt of services. It is issued by the creditor (seller of the goods) against the debtor (buyer), by which it must be sent to the latter to sign (accept), recognizing his debt. This procedure is called accepted

• EBITDA:
• English term for earnings before interest, taxes, depreciation and amortization, that is, EBITDA – earnings before interest, taxes, depreciation and amortization.

• Fundamental accounting equation:
• Assets = Chargeable liabilities + shareholders’ equity.

• Stocks:
• They represent the goods intended for sale and which vary according to the activity of the company or entity.
  Ex: Finished products, products in process, raw materials and goods for resale.

• Exhaustion:
• It is the depletion of non-renewable natural resources, such as minerals and forests, due to their use for economic purposes, recorded in permanent assets.

• Social exercise:
• It is the period of time (12 months), after which legal entities determine their results; it may or may not coincide with the calendar year, according to the statute or social contract. Under the income tax legislation, it is called the base period (monthly or annual) for calculating the tax calculation base due.

• Long-term liabilities:
• Liabilities maturing after the end of the following year.

• Administrative facts:
• They are the ones that cause changes in the elements of equity or income. For this reason, they are also called accounting facts.

• Mixed or compound facts:
• They are the ones that combine permutative facts with modifying facts, therefore they can be augmentative (they combine permutative facts with augmentative modifying facts), or diminutive (they combine permutative facts with diminutive modifying facts).

• Modifying facts:
• They are the ones that cause changes in the equity value (PL) or equity (SL), they can be increase (when they cause increases in the value of equity) or decrease (when they cause reductions in the value of equity).

• Permutative facts:
• They are those that do not cause changes in the equity value (PL) or equity (SL), but can modify the composition of the other equity elements.

• Revenues:
• It is the total of invoices issued in a given period or fiscal year for the sale of goods and services of the company or entity.

• Cash flow:
• Financial statement that shows, from the opening balance of cash (cash and banks) added to the inflows (receipts) and deducting the outflows (payments), the current balance of cash is arrived at.

• Accounting functions:
• Register, organize, demonstrate, analyze and monitor changes in equity due to the economic or social activity that the company (or entity) carries out in the economic context.

• Spending:
• It consists of a comprehensive term defined as “sacrifices with which the company or entity pays, aiming at obtaining goods or services, through the delivery or promise to deliver part of its assets, these assets being normally represented in cash”. The expense can be an investment, cost or expense.

• Immobilized:
• Assets and rights for the company’s activities, such as:
  Land, buildings, machinery and equipment, vehicles, furniture and utensils, works in progress for own use, etc.

• Taxes:
• Only governments (federal, state or municipal) can charge taxes. Thus, companies will never have revenues of this nature. The most common taxes are:
  property tax, land tax, tax on circulation of goods and services (ICMS), income tax (IR), social contribution on profits (CSSL), PIS, COFINS and ISS.

• Sales tax:
• IPI, ICMS, PIS, COFINS and ISS are considered to reduce gross sales or gross revenue.

• Current liquidity ratio:
• It seeks to demonstrate the company’s ability to pay in the short term. The exaggerated growth in accounts receivable, especially when caused by an increase in defaults, or even the volume of inventories, due to failures in production lines or obsolescence, should be excluded from the calculation of this index.
  The formula is:
  Current assets / current liabilities

• General ratio and liquidity:
• Its function is to indicate the company’s liquidity in the short and long term, hence the name general liquidity.
  An important observation is that some values ​​recorded in the RLP can hardly be “realized” in practice, such as, for example, certain judicial deposits, which should be excluded from the calculation of the ILG.
  The formula is:
  (AC + RLP) / (PC + ELP)

• Immediate liquidity ratio:
• It means the ability to settle all debt (current liabilities) for the next 12 months immediately, that is, it relies on cash, banks and financial investments to pay the liabilities due in the subsequent year. It is commonly said of the ability to pay all creditors who were at our door.
  The formula is:
  Available / current liabilities

• Dry liquidity ratio:
• This index represents the company’s ability to pay in the short term without taking into account inventories, which are considered as less liquid elements of current assets. After removing inventories from the calculation, the company’s liquidity is no longer dependent on non-monetary elements, eliminating the need for the “sale” effort to settle short-term obligations. The formula is as follows:
  (Current assets (-) inventory) / Current liabilities

• Investments:
• Funds invested in interests in other companies and in rights of any nature that are not intended to maintain the company’s activity. The main concept is that the company should not use the goods in its routine activities, such as:
  Shares, patents, works of art, properties for rent, unused properties.

• Swear:
• Remuneration attributed by the bank or financing agent for the use of resources for a certain period of time at a certain rate, or in a definition of savings:
  “Remuneration for postponing consumption” or “Remuneration of capital invested for a certain period”

• Compound interest:
• Capitalization regime where each period there is interest on the amount (principal (+) interest) up to that date, or as it is commonly said “interest on interest”.
  The basic formula is:
  P (1 + i) n, where:
  P = Principal (loan amount or financing amount)
  i = Interest rate
  n = capitalization period or incidence of interest

• Simple interest:
• Capitalization regime where only interest is paid on the principal, or commonly treated as linear interest.
  Its basic formula is:
  M = P + (P xixn), where:
  M = Amount
  P = Principal (loan amount or financing amount)
  i = Interest rate
  n = Capitalization period or interest incidence

• Ebitda:
• Earnings before interest, taxes, depreciation and amortization

• Profit:
• It occurs when the total income exceeds the total expenses of a company or entity for profit.

• Gross profit:
• Represented by gross operating revenues / sales less sales taxes and deductions for returns.

• Net income before income tax:
• Result presented when operating income is deducted from non-operating expenses and increased by non-operating income.

• Net income after income tax:
• Result available for distribution to owners based on net income before income tax, less provisions for income tax and CSSL.

• Operating profit:
• Demonstrated by gross profit less operating expenses, such as:
  Commercial, administrative, financial, net and tax.

• Accumulated profits:
• The entity’s accumulated positive results are legally highlighted but, technically, while not distributed or capitalized, they can be considered as profit reserves.

• Contribution margin:
• Demonstrated difference between the gross unit price and variable unit costs and expenses, which is responsible for supporting fixed costs and expenses, as well as providing profit in the activity.

• Promissory note:
• A net and certain debt security for which the person undertakes to pay another person a certain amount of money within a certain period. As it is a title issued by the debtor in favor of the creditor, it does not require the formality of acceptance.

• Explanatory notes (NE):
• They aim to provide the necessary information to clarify the equity situation, that is, a certain account, balance or transaction, or values ​​related to the results of the year, or to mention facts that may change such equity situation in the future, or even, it will be related to any other of the financial statements, whether the statement of origins and applications of funds, or the statement of accumulated profits or losses.

• Obligations:
• They are debts or commitments of any kind or nature assumed before third parties, or third party assets that are held by the company or entity.

• Uncovered liabilities:
• When the total assets (assets and rights) of the entity are less than the chargeable liabilities (obligations).

• Current liabilities:
• Obligations or liabilities that must be paid during the following year, such as:
  Suppliers, trade accounts payable, accounts payable, bills payable, bank loans, taxes payable / payable, salaries / charges payable.

• Chargeable liabilities:
• These are financial obligations (or debts) to third parties. Chargeable liability accounts are accounts of a creditor nature.

• Patrimony:
• It is the set of assets, rights and obligations of a person (natural or legal) that can be valued in currency.

• Net worth:
• Also known as equity, considering the amount that the owners have invested in the company or entity. Equity accounts have credit balances, divided into:
  Capital stock, capital reserves, revaluation reserves, profit reserves and accumulated profits / losses.

• Loss:
• It is the involuntary or abnormal consumption of a good or service. Losses arising from external factors will turn into expenses, and losses from factors resulting from production activity, into costs. We can use as examples:
  Fire, strikes, loss of raw material, etc …

• Permanent:
• It is related to the lack of intention of the company to convert them into cash, divided into:
  Investments, fixed assets and deferred charges.

• Accumulated losses:
• Account that records the accumulated losses of the company or entity, already absorbed the other reserves or retained earnings

• Monetary restatement principle:
• It exists because of the fact that money – although universally accepted as a measure of value – does not represent a constant unit of purchasing power. As a consequence, their formal expression must be adjusted so that the values ​​of the equity components and, consequently, the equity, remain substantially correct – that is, according to the original transactions.

• Competence principle:
• It is the principle that establishes when a given component ceases to integrate equity, to become a modifying element of equity (or equity). In other words, the administrative fact must be recorded in the consummation or occurrence of the same, regardless of its payment or receipt.

• Continuity principle:
• It states that the entity’s equity, in its qualitative and quantitative composition, depends on the conditions under which the entity’s operations are likely to develop. The suspension of its activities may have an effect on the usefulness of certain assets with the loss even in full of their value. The drop in the level of occupation can also have similar effects.

• Entity principle:
• It recognizes the patrimony as an object of accounting and affirms the patrimonial autonomy, the need for the differentiation of a particular patrimony in the universe of the existing patrimonies, regardless of belonging to a person, a group of people, a society or institution of any nature or purpose, with or non-profit. Consequently, in this sense, the assets are not to be confused with those of its partners or owners, in the case of a company or institution.

• Opportunity principle:
• It refers, simultaneously, to the timeliness and integrity of the heritage register and its changes, determining that it be done immediately and with the correct extension, regardless of the causes that originated them.

• Prudence principle:
• It determines the adoption of the lowest value for the components of the asset and the highest for those of the liability, whenever there are equally valid alternatives for the quantification of equity changes that alter the shareholders’ equity.

• Principle of registration at original value:
• It determines that the components of equity must be recorded at the original values ​​of transactions with the outside world, expressed at present value in the currency of the country, which will be maintained in the assessment of subsequent changes in equity, even when configuring aggregations (increase) or decompositions (decrease) within the company or entity.

• Accounting principles:
• Rules that are now followed and accepted – constituting the theory that underlies accounting science. In Brazil, the accounting principles are those established by Resolution CFC 750/93 – being used in the formation of this dictionary.

• Allowance for doubtful accounts:
• Reduction account of accounts / trade receivables arising from losses recorded in previous periods in a certain amount to cover the trade accounts that are considered uncollectible. Until recently, the allowance for doubtful accounts could be made based on a historical percentage of losses recorded in relation to the total accounts receivable. This percentage (as a general rule) was 3%. Currently, Brazilian law (Law 9430/96 arts. 9 to 14) determines that the allowance for doubtful accounts is constituted based on a detailed report, which must include the titles considered uncollectible and with the indication of the measures adopted to conclude it and which had an effect. Thus, there is no need to talk about a fixed percentage of allowance for losses or provision made in the historical experience of each company. It is necessary to have full control of accounts / duplicates receivable and, thus, not collecting taxes on sums even received. Exclusively for accounting purposes (financial statements), companies can (and should) adjust their rights, according to market expectations or in relation to a specific business, but in tax terms (tax base), these provisions are not deductible (there are rules and exceptions that must be applied in accordance with the Income Tax Regulation and the Federal Accounting Council Rules).

• Long-term achievable:
• Realizable rights after the end of the subsequent year, such as:
  Compulsory deposits, deferred taxes, rights derived from sales, advances or loans to affiliated or controlled companies, shareholders, directors or profit participants (do not constitute usual business).

• Gross revenue:
• It is the total billing (invoices issued) in a given period or fiscal year for the sale of goods and services of the company or entity.

• Recipes:
• They are inputs of elements to the company’s assets, in the form of assets or rights that always cause an increase in the net worth.

• Cash regime:
• When, when calculating the results of the year, only payments and receipts made in the period are considered. It can only be used in non-profit entities, where the concepts of receipts and payments are often identified with the concepts of income and expenses.

• Accrual method:
• When, when calculating the results for the year, revenues and expenses are considered, regardless of their receipts or payments. It is mandatory in all for-profit entities.

• Capital reserves:
• These are contributions received by owners or third parties, which have nothing to do with income or earnings.

• Profit reserves:
• They are obtained by the appropriation of profits from the company or the company for various reasons, legal, statutory or other reasons.

• Revaluation reserves:
• They indicate an increase in value to the acquisition cost of assets already monetarily adjusted, based on the market, and must be obtained through an appraisal report signed by a qualified professional (accountant, engineer, economist) and accredited.

• Future income for the year:
• It comprises revenue received in advance (anticipated revenue) which, according to the accrual basis, belongs to a future exercise.

• Operating result (operating profit or loss):
• It is the one that represents the result of the main activities that are the object of the legal entity.

• Positive equity:
• It is also known as a surplus, occurring when the total of positive elements (assets and rights) exceeds the total of negative elements (debts and / or obligations).

• Negative equity:
• Also called an overdraft or deficit liability, since the total of negative elements (obligations) exceeds the total of positive elements (assets and rights).

• Surplus:
• Term used in finance to represent the positive balance of cash and bank financial operations. In public accounting it represents the equivalent of profit in the private company, that is, when public revenues exceed public expenses.

• Effective interest rate:
• Calculated real rate in a financial transaction, showing the real rate, taking into account the basic formula of compound interest. Such a prerogative occurs in countries (such as Brazil) where rates are very high and economic instability (combined with inflation).

• Internal rate of return:
• Its acronym is TIR, it is the compound interest rate that makes resources equivalent over time, that is, if you are going to compare a value (or series) in the past or future, this internal rate will make financial resources equivalent. The English term is IIR = Internal return rate.

• Nominal interest rate:
• “Apparent” rate in a financial transaction showing the rate charged taking into account the basic formula of simple interest. Such a prerogative occurs in countries with a stabilized economy and with rates offered much lower than those of Brazil (interestingly in Japan, nominal rates are negative!?!?)

• Future value:
• A value (or series of values) over the future time already subject to an interest rate, to amortize a debt assumed at an earlier time.

• Present value:
• It is a value (or series of values), whether of the past or future, which, subject to a certain compound interest rate, reflects its value at a present date, or focal date.

• Net present value:
• It is about considering a value (or a series of values) in a given cash flow, generally considered in a financial transaction or in a financial project, and by applying a certain compound interest rate, a flow’s present value is obtained discounted cash flow.

• Sale:
• Administrative fact where it presents the promise of delivery of a good or service that can be carried out or not, usually characterized by an order or purchase order.