Accounting Definitions

This page holds our Financial Expert™ Definitions of accounting jargon and terms. Cut through accounting jargon with our explainers. Each definition page is much more than an accounting definition. Beyond …

Turnover – Definition

Definition of turnover (accounting): Income. Turnover is used interchangeably with revenue and gross income in the context of financial reporting. What is turnover? Turnover is an accounting term used most …

Profit – Definition

Definition of profit (investing): a financial gain, measured as the difference between the income and the costs of a particular investment or activity. What is profit? Profit is measured as: …

Overheads – Definition

Definition of overheads: A business cost which is not directly linked to production or the provision of a service. What are overheads? Overhead is a name given to the collection …

Liability – Definition

Definition of liability (accounting): A present obligation arising from past events. What is a liability? A liability is something a business will need to settle or pay in the future. …

Journal Entry – Definition

Definition of journal (accounting): An accounting record of a single transaction, in the ‘double entry’ accounting format. What is a journal? In simple English, a journal entry is an instruction …

Joint Venture – Definition

Definition of joint venture (business): A formal partnership between two independent organisations, which sees the partners share resources to achieve a common objective. Definition of joint venture (accounting): An arrangement …

Gross Margin – Definition

Definition of gross margin: A ratio expressing gross profit as a percentage of revenue. Gross margin is also known as gross profit margin. How to calculate gross margin Here’s an …

Goodwill – Definition

Definition of goodwill (accounting): Goodwill represents the excess price for an asset over and above the identifiable fair value of an asset. What is goodwill? Goodwill is quite a complex …

Financial Statements – Definition

Definition of financial statements: A periodic report which discloses the financial performance and financial position of a company, along with other necessary disclosures. What are financial statements? Financial statements are …

Equity – Definition

Definition of equity (finance): the element of a organisations total value which is attributable to its shareholders Definition of equity (accounting): the book value of assets minus liabilities. The net …

Capital Expenditure – Definition

Definition of capital expenditure (accounting): An outlay of a company’s funds on the purchase of equipment, tooling, machinery or sometimes property. Capital expenditure is often shortened to ‘capex’ when spoken …

Asset – Definition

Definition of asset: An asset is a contractual right to a future economic benefit. Informally, it can also refer to anything or anyone of value. What does asset mean? Said …