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  • Writer's pictureSarah Egan

28 English Accounting and Finance terms to keep you on the ball.

Updated: Feb 17, 2022

Here you'll see some very useful phrases & vocabulary for your Accounting and Finance working life.

1. Assets

Definition: Everything a company owns, including cash, accounts receivable (money a company is going to receive, see below), property and goods.


A company’s assets are fairly easy to calculate and can be categorised into tangible and intangible assets.

2. Accounting Period

Definition: The amount of time in which financial statements are produced, generally a year.


The accounting period the investors were interested in was longer than the typical financial year as they were looking to get the big picture of the company’s revenue & profitability.

3. Accounts Payable

Definition: Money that a company owes to other parties—companies or people—called creditors. Accounts payable are considered liabilities.


All of the accounts payable need to be cleared before we can invest in new software.

4. Accounts Receivable

Definition: Money that a company has to receive for products or services bought by customers or clients.


You can calculate the accounts receivable by adding up all the invoices the company generated.

5. Appreciation

Definition: The increase in the value of a company’s assets. Appreciation can be the result of an increase in demand for a product or service. The verb form is to appreciate.


Although their balance sheet didn’t look very promising, the company seemed worth investing in because of an anticipated appreciation in the value of their product.

6. Auditor

Definition: A person whose job is to evaluate accounting records in order to make sure they have been done properly and to check if the company is being run efficiently.


When the auditors asked for additional information about the financial statements, our accountants complied without delay.

7. Balance Sheet

Definition: A document that records a company’s assets and liabilities at a certain moment in time. If we’re talking about a public company, it also shows the shareholders’ equity (how much the shareholders own).

The balance sheet is based on the accounting equation:

assets = liabilities + owner’s equity

The balance sheet is important for potential investors because they can see how the company is doing.


We studied the balance sheet carefully to see if the assets exceeded the liabilities and shareholders’ equity.

8. Bookkeeper

Definition: A person whose job is to record daily transactions, issue invoices and complete payrolls. Bookkeepers are usually supervised by accountants. Bookkeepers are required to have less experience than accountants and don’t need a degree in accounting.


She was training to become an accountant, but in the meantime she had a part-time job as a bookkeeper.

9. Chartered Accountant

Definition: An accountant who has a certain amount of experience and who has passed certain exams that qualify them to be a member of an institution, such as the Institute of Chartered Accountants in the UK. In the US a similar title is that of Certified Public Accountant (CPA).


She’s been studying to become a chartered accountant for a few years now, but she just couldn’t manage to pass the final exam.

10. Credit

Definition: An entry that shows how much money a company receives. Credits are recorded on the right side of accounts.


She realized that the total debits didn’t equal the total credits, so she had to check each entry all over again.

11. Capital

Definition: Cash and funds, but also machinery and tangible assets that can contribute to earning more money, like computers, company vehicles, etc. Intangible assets like expertise or reputation are not considered to be capital.


He couldn’t start a business because he didn’t have enough capital, so he decided to work as a freelancer for the time being.

12. Cash Flow

Definition: Money coming in (inflows) and going out (outflows) of a company.


They had a cash flow problem because only a small percentage of their customers decided to use early settlement discounts, which meant that they had very high financing costs.

13. Debit

Definition: An entry that shows what a company spends. Debits are recorded on the left side of an account.


She recorded the purchase of the new laptops as a debit entry.

14. Depreciation

Definition: The decrease in the value of products or services a company offers. Depreciation can be due to a high supply of similar products or services offered by competitors. The verb form is to depreciate.


Because the company had almost no competitors just a year ago, nobody would have thought that their products would depreciate so much.

15. Double Entry

Definition: An accounting system in which each transaction is recorded as both a credit and a debit, an asset and a liability.


Double entry bookkeeping gives you a better perspective than single entry bookkeeping because it helps you make sure each transaction is accurately recorded.

16. Financial Statements

Definition: Documents that show the financial situation of a company. They include the balance sheet (showing assets, liabilities and shareholders’ equity, see above), the income statement (showing revenues and expenses) and statement of cash flows (showing cash flow fluctuations in a certain accounting period).


The accountants were all busy working on the financial statements as the company was planning to refinance its loans.

17. Gross

Definition: An amount of money before taxes are deducted.


Her gross income exceeded his, but they still couldn’t afford to get the house they’d been dreaming about for such a long time.

18. Income Tax

Definition: Money that individuals and companies owe to the government, based on the income they make.


She was a sole proprietor and she hired an accountant to file her income tax return every year.

19. Liabilities

Definition: Everything that a company owes to others, like loans and mortgages.


Liabilities are recorded on the right side of the balance sheet, while assets are

20. Net

Definition: An amount of money that is left after taxes have been paid.


She couldn’t tell me her net salary because she didn’t know all the taxes she was paying; moreover, salaries are not transparent in her company.

21. Overhead

Definition: All the expenses a company needs to pay for, like the costs of advertising, labor, bills and taxes.


Their overhead expenses were so high that they had been making very little profit, so they decided to cut back on marketing.

22. Owner’s Equity

Definition: A part of a company’s assets that the owner has. It’s calculated as assets minus liabilities.


Unfortunately, in his company’s case, the owner’s equity didn’t amount to much: they had a lot of liabilities and not enough assets.

23. Profit

Definition: The money a business is left with after deducting all the expenses.


In order to decide if the company was worth investing in, they wanted to look at the profit it had been making over the previous year.

24. Revenue

Definition: The total amount of money a company receives from the services or products it sells. The revenue is higher than the profit, because in order to calculate the profit, you need to first see the costs of doing business.


Our company has experienced a decrease in revenue due to the financial crisis.

25. Return on Investment (ROI)

Definition: The profitability ratio of a certain investment. The return on investment is calculated as the benefit gained from the investment divided by the cost of the investment.


As their return on investment hit the lowest point in the last 5 years, they decided to stop investing in our company.

26. Share

Definition: A unit of ownership in a company. The person or organization who owns shares (the shareholder, see below) is entitled to dividends (usually cash), but they also share the responsibility if there are losses.


He decided to invest in shares of a very profitable company instead of considering a savings account, because he was sure he could make money fast and he enjoyed taking risks.

27. Shareholder

Definition: A person or organisation (company or any other institution) that owns shares in a company. Shareholders are, in a way, the owners of a company. If the company is doing well, the value of the shares goes up. If, on the contrary, the company is not profitable, the value of its shares decreases.


Because he was a shareholder in the company, he had to attend annual General Meetings in order to keep up with the latest news and to vote for new members of the Board of Directors.

28. Value Added Tax (VAT)

Definition: A tax that consumers pay on most products and services, except most food and drugs. Not all countries have a VAT system. In the US, most states have something similar, called a sales tax.


The bookkeeper had to calculate the Value Added Tax in order to issue the invoice.


Look at the following sentences and choose the correct answer. Sometimes, there’s more than one correct answer.

When you’re done, check your answers in the key at the bottom!

1. They had to hire a(n) ___ because Jane was not qualified to produce all the documents for the audit in June.

A. auditor B. accountant C. bookkeeper

2./3. Her ___(2.) salary at her new workplace was higher than her ___(3.) salary in the old one, so she was much happier here.

2. A. net B. gross

3. A. net B. gross

4./5./6. The basic accounting equation is: ___(4.) = ___(5.) + ___(6.)

4. A. assets B. liabilities C. owner’s equity

5. A. liabilities B. owner’s equity C. assets

6. A. owner’s equity B. assets C. liabilities

7./8. In order to see what a company’s ___(7.) is/are, you need to have a look at the ___(8.) and subtract all the expenses of doing business.

7. A. profit B. capital C. revenues

8. A. revenues B. profit C. liabilities

9. The ___ is an important accounting document showing a company’s assets, liabilities and the owner’s equity.

A. cash flow statement B. balance sheet C. income statement

10./11./12. In ___(10.), you need to record ___(11.) on the left side and ___(12.) on the right side.

10. A. double entry bookkeeping B. single entry bookkeeping

11. A. debits B. credits

12. A. credits B. debits

13. He was hoping to be able to raise enough ___ to set up his own business in five years’ time.

A. assets B. capital C. equity

14. As she was calculating the company’s liabilities, she realized she forgot to include the ___.

A. accounts payable B. accounts receivable

15. He had been trying to pass his exams in order to become a(n) ___, but in the end he gave up and decided to charge a higher fee for his bookkeeping services in order to make ends meet.

A. chartered accountant B. shareholder C. investor

16. The auditor was looking at the financial statements that the company presented him when he realized he was actually interested in a different ___. He then had to ask for a different set of financial statements.

A. income statement B. payroll C. accounting period

17. She was considering giving up working as an accountant for that company and becoming a self-employed freelancer because the ___ she had to pay was lower. She also had the expertise to file her own tax return, which was an additional advantage.

A. income tax B. Value Added Tax

18. The idea of becoming a shareholder seemed really bad now that the ___ was lower than in any other previous year.

A. share price B. return on investment

19. Their ___ was too high during the past few months, so they have been thinking of either not giving their employees any bonuses this year or investing less in advertising.

A. overhead B. appreciation C. depreciation

Now have a look at the key below and see how well you did!

Answer Key

  1. B

  2. A

  3. B

  4. A

  5. B or A

  6. C (if 5 is B) or A (if 5 is A)

  7. A

  8. A

  9. B

  10. A

  11. A

  12. A

  13. B

  14. A

  15. A

  16. C

  17. A

  18. B

  19. A

Don’t forget to keep the words that are most important for you and your business activity handy, so that you can find them easily and check their exact meaning, spelling and pronunciation.

Now that you’ve learned and practiced all these words, the only thing left is to incorporate them into your daily business English use!

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