cash flow
The movement of money into and out of a business over time.
Example: Late-paying customers hurt the shop's cash flow.
B216 words · Upper-intermediate
Finance & Accounting vocabulary — B2
Finance and accounting vocabulary for managing a business's books, including cash flow, working capital, depreciation and the audit that checks them.
16 questions
Words in this set
16working capital
The money a business has available for its day-to-day running costs, found by subtracting short-term debts from short-term assets.
Example:
Slow-paying clients squeezed the company's working capital.
equity
/ˈɛkwəti/The value of a business that belongs to its owners once all debts are subtracted.
Example:
She sold part of her equity in the company to raise cash.
depreciation
/dɪˌpriʃiˈeɪʃən/The gradual fall in the value of equipment or property over time.
Example:
The accountant calculated depreciation on the company's vehicles.
amortization
/ˌæmərtɪˈzeɪʃən/The process of gradually paying off a debt, or spreading the cost of something, over a set period.
Example:
The loan's amortization is spread over ten years.
accrual
/əˈkruəl/Money that has been earned or owed but not yet paid or received.
Example:
The accountant recorded the unpaid interest as an accrual.
audit
/ˈɔdɪt/An official check of a company's financial records to make sure they are correct.
Example:
An outside firm carried out the annual audit.
liquidity
/lɪˈkwɪdəti/How easily a company's assets can be turned into cash.
Example:
The bank keeps enough liquidity to cover sudden withdrawals.
overdraft
/ˈoʊvərˌdræft/An arrangement letting you take out more money than is in your account.
Example:
She went into an overdraft after paying rent early this month.
write-off
Removing a debt or asset from the accounts because it cannot be recovered.
Example:
The unpaid invoice was recorded as a write-off at year end.
gross margin
What is left from sales after the direct costs are taken off.
Example:
Gross margin held up while everything else fell.
provision
/prəˈvɪʒən/Money set aside in accounts for an expected cost.
Example:
A provision was made for the legal costs in the same quarter.
remittance
/riˈmɪtəns/A payment sent to settle an invoice.
Example:
The remittance arrived without any reference number attached.
creditor
/ˈkrɛdətər/A person or company that is owed money.
Example:
Every creditor was contacted on the same afternoon.
debtor
/ˈdɛtər/A person or company that owes money.
Example:
One debtor accounted for most of the outstanding balance.
write-down
A reduction in the recorded value of an asset.
Example:
A write-down of the stock turned a small profit into a loss.
