Quick Guide to Accounting Abbreviations

Quick Guide to Accounting Abbreviations

When you start a business you quickly find out that you need to understand accounting terms. Whether you are dealing with your accountant, bookkeeper or doing the accounting yourself, you will encounter accounting abbreviations. Most business people have heard of "Accounts Payable" (AP) and "Accounts Receivable" (AR). But what about AJE? That stands for "Adjusting Journal Entry" which you will likely encounter when your accountant is ready to close your accounting books for your business' fiscal year.

I have been in business for several years and have compiled a list below of some of the most common accounting abbreviations and accounting terms that you will encounter. Having this handy list available helps you focus on your business rather than spending excessive time deciphering accounting terms. Even if you use accounting software such as QuickBooks, it is still useful to become familiar with these terms.

* ABC: Activity Based Costing
* AJE: Adjusting Journal Entry
* AP: Accounts Payable
* AR: Accounts Receivable
* AT: Asset Turnover
* BB: Beginning Balance (see also: EB)
* BV: Book Value
* CJE: Closing Journal Entry
* CM: Contribution Margin (= Sales less Variable Costs)
* COGM: Cost Of Goods Manufactured
* Cr: Credit
* CVP: Cost-Volume-Profit
* Dr: Debit
* EB: Ending Balance (see also BB)
* EPS: Earnings Per Share
* EVA: Economic Value Added
* FIFO: First In, First Out (see also: LIFO)
* FC: Fixed Costs (see also: VC)
* FS: Financial Statements
* FYE: Fiscal Year End; (e.g.: FYE2010)
* GAAP: Generally Accepted Accounting Principles
* GL: General Ledger
* IS: Income Statement
* ISO: International Standards Organization
* JE: Journal Entry
* JIT: Just In Time
* LIFO: Last In, First Out (see also: FIFO)
* LOC: Line of Credit
* NI: Net Income
* OH: Overhead
* PL: Profit/Loss Statement
* PM: Profit Margin
* PVA: Process Value Analysis
* RE: Retained Earnings
* ROI: Return On Investment
* SAG Expenses: Selling, Administrative, and General Expenses
* SHE: Stockholders Equity
* SP: Sales Price (price of goods/services sold)
* TB: Trial Balance
* VC: Variable Costs (see also: FC)
* WIP: Work-In-Progress

There are many other accounting terms but the above terms are the ones that I have found are a good starting point for understand accounting abbreviations.

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About the Author: DrCr.com is an accounting resources center for small business.