Numbers dressed up in fancy suits pretending to be words.
Changes made to financial statements to remove one-time or unusual items and show what 'normal' operations look like, assuming such a thing exists. It's the accounting version of 'this isn't my usual performance.'
When a supplier extends credit or loans to help customers buy their products, effectively becoming a bank out of desperation to make sales. It's what happens when your product is so expensive that customers need financing just to afford it.
Current assets divided by current liabilities, measuring whether you can pay short-term bills with short-term assets. A ratio above 1.0 suggests solvency; below suggests you should probably start returning the recruiters' calls.
The polite accounting term for 'the numbers don't match and someone's either incompetent or stealing.' These are inconsistencies between what should be and what actually is in financial records, inventory counts, or data sets. Finding discrepancies is either the start of a really boring afternoon of reconciliation or a really exciting fraud investigation.
Internal accounting focused on providing information for management decisions rather than external reporting. Unlike financial accounting's rigid rules, managerial accounting embraces whatever analysis helps executives decide which division to blame for poor performance.
Informal direction from central banks to commercial banks about lending levels, used extensively in Japan to control credit without formal policy. It's called 'guidance' but functions more like strongly-worded suggestions you can't ignore.
Combining the financial statements of a parent company and its subsidiaries into a single unified report, eliminating intercompany transactions to avoid counting the same revenue twice. It's like merging family budgets while hiding the money you owe your brother.
The prices charged between subsidiaries of the same multinational corporation for goods or services, theoretically based on arm's-length principles but conveniently used to shift profits to low-tax jurisdictions. Tax authorities are not amused.
A government's unconditional guarantee to honor debt obligations using its taxing power, theoretically the safest backing possible. 'We'll tax citizens into oblivion before we default' in more dignified language.
A simplified cost accounting system that records costs only when production is complete, skipping the tedious tracking of work-in-process. It's for manufacturers who prefer speed over precision and assume everything flows smoothly.
The ancient art of recording, classifying, and summarizing financial transactions, then presenting them in ways that either enlighten or confuse everyone involved. It's the language of business, spoken fluently by people who find tax codes exciting. Keeps companies legal, investors informed, and provides employment for millions who really, really like spreadsheets.
The direct costs of producing goods or services that were actually sold, abbreviated as COGS. It includes materials and labor but not the CEO's golf club membership, no matter how insistently he argues it's 'client development.'
The process of distributing an acquisition's cost across the target company's assets and liabilities at fair value, usually creating a giant plug number called goodwill for the amount that can't be justified. It's accounting's way of making an overpriced acquisition look systematic.
The cumulative profits a company has kept rather than distributing to shareholders as dividends—basically the corporate equivalent of money in the mattress. It's how companies fund growth without begging investors for more cash.
The polite adjective for anything related to money arguments in government or business, where "budgetary concerns" means "we don't want to pay for that." It's the formal way of discussing fiscal matters while avoiding words like "broke," "wasteful," or "embezzled." When someone mentions budgetary constraints, they're either actually out of money or just don't want to fund your brilliant idea.
Loans with few or no maintenance covenants that would normally protect lenders, essentially trusting borrowers to be responsible without supervision. It's the financial equivalent of lending your car to a teenager with no curfew.
Resources, inventory, or funds deliberately kept back for future emergencies, strategic opportunities, or that inevitable moment when everything goes sideways. In business, it's the financial equivalent of keeping a spare tire in your trunk—boring until you desperately need it. Banks love reserves; accountants worship them; entrepreneurs pretend they have them.
The fundamental method used to determine when transactions are recorded—either when cash moves (cash basis) or when obligations occur (accrual basis). Like choosing whether to count calories when you eat or when you order.
A hierarchy determining who gets paid first when money comes in, ensuring investors and executives eat before employees see a dime. It's trickle-down economics but explicitly documented.
The magical percentage retailers add to their costs to create what they optimistically call a "selling price," essentially the difference between what they paid and what they're convinced you'll pay. In tech, it's the invisible code that tells computers how to format text without making it look like a ransom note. Both definitions involve making something look more expensive or prettier than it actually is.
The predetermined order in which cash flows are distributed among different classes of investors, with senior investors getting paid before junior ones. It's like a literal waterfall—money flows down until each tier is satisfied.
To verify that the sum of row totals equals the sum of column totals in a spreadsheet, because trusting your formulas is for amateurs. It's the accounting equivalent of checking your math twice before raising your hand.
When an asset increases in value over time without you lifting a finger—the financial equivalent of your wine collection getting better with age. It's what homeowners brag about at parties and what makes early Bitcoin investors insufferable. The opposite of depreciation, and the reason everyone thinks they're a real estate genius in a bull market.
Everything a business owes to others—debts, obligations, and promises to pay that hang over the company like a financial sword of Damocles. It's the right side of the balance sheet that accountants love to balance against assets, creating the fundamental equation of accounting. Can also mean that person on your team who's more problem than solution.