Accrued Dictionary

Taxes Noun. [tak-sez] Accrued Dictionary definition: Toll bridges on your year long journey. You see the “tolls ahead” signs and have to slow down, figure out how much you owe (Am I two axles or six? What exit did I get on? Do I have to pay for that part of my trip, or just […]

“Depreciation” came up in a meeting. A dictionary said it means “allocating the cost of a physical asset over its life expectancy to help companies earn revenue from an asset while expensing some of its cost each year it is being used, representing how much value has already been used.” Here’s what your accountant really means when she says “depreciation.”

Your accountant is forecasting your cash runway. She says the cash runway is “the amount of time you can continue to operate if you don’t have any money coming in. Let’s say you have $60,000 in the bank and it costs you $10,000 just to operate, you have 6 months before it will run out.” Here’s what she really means when she talks about a “cash runway.”

Your accountant mentioned “scrubbing the general ledger” the other day. You couldn’t find what it meant on the internet, so you assumed it’s something along the lines of doing the dishes, but on numbers in your general ledger. You’ll probably decide to ask her later, but for right now, here’s what she really means when she says “scrubbing the GL.”

You heard the word “intercompany” in an accounting drama on TV. What the actor said it means is “a relationship between separate legal entities that belong to the same corporate enterprise, like a parent company and it’s subsidiaries that makes transactions between them very complex.” Here’s what it really means when they say, “intercompany.”

You overheard an accountant say she’s a “financial controller.” She said that means she manages all finance and accounting operations of a business, from coordinating and directing the preparation of the budget to forecasting to reporting variances to prepping monthly financial statements. Here’s what accountants really mean by “financial controller.”

Your accountant mentions “accounts receivable aging.” She says it means “the method of sorting the customer receivables by the due date to estimate the bad debts expense to the business. Accounts receivables arise when the business provides goods and services on a credit to the clients.” Here’s what she really means by “accounts receivable.”

Your accountant is scrubbing the general ledger this month. She says the general ledger is “the record keeping system of all of a company’s financial data, from debit and credit card spending to expansion, providing a true record of every financial transaction a company makes in its entire lifetime.” Here’s what she really means by a “general ledger.”

So your accountant is talking about “balance sheet reconciliation.” She tells you it means “a balancing of the amount on your balance sheet GL accounts and the details that make up those balances, while ensuring that any differences are adequately and reasonably explained.” Here’s what she really means when she says, “balance sheet reconciliation.”

Your accountant is collecting all receipts from the year. He says they are a “a written proof of purchase of having received an agreed upon amount of money, goods, services, etc. that can be physical or digital, but should be kept organized because they’re important throughout the year.” Here’s what he really means when he talks about “receipts.”