Glossary

Accrual. A cost or income that belongs to a period even though the money has not moved yet, such as a bill for work done in March that arrives in April.

Balance sheet. What the company owns (assets) and owes (liabilities and equity) on a particular date.

Brand. A trading name, website, product, department or channel within a legal entity. Not a separate company.

Chart of accounts. The list of accounts that your books are kept in.

Company ledger. The complete set of books for a legal entity.

Credit note. A document that reduces an invoice or bill that was already issued.

Debit and credit. The two sides of every entry. In a correct set of books, total debits always equal total credits.

Draft. Saved but not yet recorded in the books. Safe to edit.

Functional currency. The main currency a legal entity keeps its books in.

iXBRL. The computer-readable format HMRC and Companies House use for accounts.

Journal. A manual entry in the books.

Legal entity. The company, partnership or sole trader that legally owns the money.

Micro-entity / small company. The two smallest company sizes, with simpler statutory accounts. See Year-end accounts.

Posting. Recording a document in the books. A posted document cannot be edited; it can be reversed or credited.

Reconcile. Deciding what each bank row is, so your books agree with your bank.

Reversal. An entry that cancels an earlier one, linked to it, so history is kept.

Trial balance. A list of every account’s balance. Debits and credits must be equal.