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Financial Report Terms

This reference defines common accounting categories and terms used throughout Kezi's financial reporting suite.

Balance Sheet Terms

Assets

  • Current Assets: Assets expected to be converted into cash within one year (e.g., Cash, Accounts Receivable, Inventory).
  • Fixed Assets: Long-term tangible assets used in business operations (e.g., Machinery, Vehicles, Furniture).
  • Accumulated Depreciation: The total amount an asset's value has been reduced over time (displayed as a negative value against Fixed Assets).

Liabilities

  • Current Liabilities: Debts or obligations due within one year (e.g., Accounts Payable, Short-term Loans, Accrued Expenses).
  • Non-Current Liabilities: Long-term obligations due after more than one year (e.g., Mortgages, Long-term Bank Loans).

Equity

  • Share Capital: The total amount of money invested by the owners/shareholders.
  • Retained Earnings: Cumulative profit or loss from previous years that has been kept in the business.
  • Current Year Earnings: The net profit or loss generated in the current fiscal year up to the report date.

Profit and Loss (Income Statement) Terms

  • Operating Revenue: Income earned from the primary activities of the business (e.g., Sales of goods or services).
  • Cost of Goods Sold (COGS): The direct costs of producing or purchasing the goods sold by a business.
  • Gross Profit: Operating Revenue minus COGS.
  • Operating Expenses: Costs required to run the business day-to-day (e.g., Rent, Utilities, Salaries, Marketing).
  • EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization.
  • Net Profit/Loss: The "bottom line" representing total revenue minus total expenses and taxes.

General Glossary

  • Debit (DR): An entry on the left side of an account. Increases Assets and Expenses; decreases Liabilities, Equity, and Revenue.
  • Credit (CR): An entry on the right side of an account. Increases Liabilities, Equity, and Revenue; decreases Assets and Expenses.
  • Opening Balance: The balance of an account at the start of a period.
  • Closing Balance: The balance of an account at the end of a period, after all transactions are recorded.
  • Aging: A method of grouping accounts receivable or accounts payable by the length of time they have been outstanding (e.g., 0-30 days, 31-60 days).