Unless you are an accountant, you may not know what people are talking about when they mention certain terms. Human nature dictates that we're either embarrassed or ashamed to ask what certain words mean. In the event you have been hearing terms that you are unfamiliar with, let's go over a few commonly used terms.

First things first, the word account has many different meanings. When the term is used in accounting, it is used to refer to different types of accounts that are held within a corporation; like sales accounts, accounts receivable and cash accounts.

A company may have several different types of accounts, like cash accounts, receivables and sales. These are some of the most common types of accounts that businesses have that keep the money straight.

An annuity is a return on an investment that renders the same amount of money in the same intervals of time. This is like when you get an interest check each year, at the same time of year. It's something that you can rely on.

When you have debt, it is referring to the amount of money that you owe to another person, or a lending institution. Many times, when your debt is greater than your worth, you are said to be in an upside down situation.

Depreciation is a term that is used to describe an item's loss of value. When something depreciates, it loses how much value it has. This can be said of accounts, cars and other investments.

Typically, a gain and a loss relate to your end of year ledgers. When you get something monetarily over and above what you paid for your investment or article that you sold, you call it a gain. Gains must be taxed or levied by the government and Internal Revenue Service.

When you lose money on the sale or trade of any asset, you call it a loss. At the end of the year when it comes tax time, your losses will be weighed against your gains. You will only pay taxes on the amount that is equal to your gains less your loses.

You'll hear people talk about r and d and r and d costs. This simply refers to research and development, which is a huge part of any and all corporate infrastructure. It weighs heavily when dealing with businesses and accounting.

Standard cost is something that is a set cost for an item or service. It helps people estimate what sort of costs they will be incurring in the future for particular things that they know they will need. This can help business in large part, make budgets for the year.

These are just a few of the terms that you may hear when people are discussing business and accounting practices. You'll hear these terms on the news, read them in the papers and hear business men everywhere dropping them like they were names of superstars. There are many other terms that will be used and if you're interested, there are many places online to look for their definitions. Simply go to your favorite search engine and run a search on the word.

You'll always be your clients' financial best friend. Certified Public Accountant Arizona You will become incredibly familiar with local, state and federal tax laws. They will make sure that you're getting a fair shake from the Internal Revenue Service.

categories: accounting,accountant,cpa,business,finance,tax,law,irs,deductions,withholding,government,expense

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