Jargon buster or jargon bluster? Common accounting terms explained
So, you’ve finally found an accountant to do some of the financial heavy lifting. This could save you up to 120 hours of your valuable time per year. The only problem is, sometimes, you don’t understand a word they’re saying. You’re not alone in this; many small-business owners are left feeling a little out of their depth when navigating the jargon. Luckily, there are plenty of resources available to help you get to grips with the terms. Why not take our accounting jargon quiz to test your knowledge? You might even pick up a few new things.
Know your jargon
Like any profession, accountants love to throw words around that you may or may not know. Below are eight words or terms regularly used in this profession. Do you know what they mean?
- Expensing for intangible assets, e.g. intellectual property
- Receiving your earnings through dividends rather than PAYE
- Dissolving a partnership
- Central Gross Tax
- Capital Gains Tax
- Country Generation Tax
3) Deferred tax liability
- An extension to the tax deadline set by HMRC allowing you to pay tax late
- Paying extra tax now, so you pay less in the future
- A record of the fact you will pay more tax in future because of a transaction that took place in the current period
- Bringing a company to an end and distributing its assets to claimants
- When a company cannot pay debts owed due to inadequate cash flow
- A company that has been relieved from the payment of all debts by the courts after the surrender of assets
- Payment After You Earn
- Pay Annual Yield Earnings
- Pay As You Earn
- Money invested in your company
- The net worth of your company
- Profits or losses from your business
- The government’s new initiative to make record keeping and submission a digital process
- A law that states accountants must keep your business accounting software up to date
- A scheme that requires all companies to use the same accounting software
You can find the answers at the bottom of the page. So, how did you do? Is it more jargon buster or jargon bluster?
These terms might crop up when you’re talking to your accountant, and now you’ll know what they mean, but there are still hundreds of terms you might not be familiar with, and that’s fine. If it’s something you really need or want to know, any reputable accountant will be more than happy to lend a hand in helping you understand your business accounting.
So you didn’t ace the quiz? Don’t worry! You don’t need to know these things – leave it to the professionals. If you need any more information about working with professional accountants, just give Big Hand a call on 0161 327 2911.
Answers: 1) A, 2) B, 3) C, 4) C, 5) C, 6) B, 7) A