Accounting Abbreviations

15.09.2022
Stefan

While accounting is all about numbers, they are not the only thing that matters to keeping your books in order. So, let’s take a break from the numbers and look at some letters known as accounting abbreviations. We’ve listed the most important ones and some helpful financial glossary below to help you stay on top of your accounting operations.

The Most Essential Accounting Abbreviations & Acronyms

401(k) & Roth 401(k): Those are savings plans that allow employees to put aside part of their salary into an investment-based retirement account. In the case of 401(k), income taxes are deferred on earnings and contributions, while with Roth 401(k), contributions are made after taxes.

A/C (Account/current) – A record of financial transactions. The account abbreviation may also refer to a specific contract between two businesses. 

AB (Accumulated benefits) – The total value of all the benefits accrued by a participant in a pension plan.

ABS (Asset-backed securities) – Investments backed by loans or other assets.

ACCT/ACGT (Accounting) – The process of recording, classifying, and summarizing financial transactions to provide valuable information for the business decision-making process—usually done using accounting software. ACCT is one of the accounting acronyms that could have a double meaning since it can also be used as an abbreviation for accountant. 

AD (Abbreviation for the accounting department)

ADJ (Adjustment) – An accounting entry that alters the financial statement balance of an account.

ADA (Allowance for doubtful accounts) – An estimate of the amount of money a company expects to lose on its uncollectible accounts.

ADR  (American depositary receipt) – A certificate representing ownership of shares in a foreign company that a bank in the US holds.

ADT (Auditing) – Examining financial statements and other information, typically at the end of the accounting cycle to ascertain the degree of correspondence between those statements and established criteria.

AGI (Adjusted gross income) – One of the most critical accounting acronyms signifies a taxpayer’s total income minus certain deductions and exemptions.

AGM (Annual general meeting) – A meeting of the shareholders of a company is held annually to elect directors and discuss other matters.

AICPA (American Institute of Certified Public Accountants) – A professional organization that sets standards for the accounting profession and those with degrees in accounting in the United States.

AIM (Alternative investment management) – A type of investment management not regulated by the SEC, including hedge funds, venture capital, and private equity.

AIT (Adjusted for taxes) – A way of measuring a company’s performance or investment that adjusts for the effect of taxation.

ALCO (Asset-liability committee) – A committee of a bank’s management that reviews and approves the bank’s lending and borrowing policies.

ALLL (Allowance for loan and lease losses) – An estimate of the amount of money a company expects to lose on its outstanding loans and leases.

AM (Abbreviation for accounting manager) – The person who is responsible for managing a company’s accounts.

AML (Anti-money laundering) – One of the essential accounting acronyms on an international level that signifies a set of laws and regulations designed to prevent financial institutions from being used to launder money or finance terrorism.

AMT (Alternative minimum tax) – This tax places a floor on the percentage of taxes owed to the government. It applies to some individuals, estates, and trusts who owe more tax under the AMT than the regular income tax.

AUM (Asset under management) – The total value of all the assets a money manager is responsible for.

AP (Abbreviation for accounts payable) – A liability account on a company’s balance sheet representing money the company owes to its suppliers.

APA (Accounting principles applied) – A set of accounting standards for financial statements.

AR (Accounts receivable abbreviation) – An asset account on a company’s balance sheet representing money the company is owed by its customers.

ARR (Adjusted rate of return) – A way of measuring a company’s performance or investment that adjusts for the effect of inflation.

AS (Accounting standard) – This is yet another entry in our accounting acronyms glossary that refers to a set of guidelines issued by an accounting standard-setting body that financial statement preparers must follow when preparing financial statements. They also must respect the golden rules of accounting. 

ASC (Accounting Standards Committee) – A committee of the American Institute of Certified Public Accountants that develops and updates accounting standards.

ATM (At the money) – A term used in option pricing to describe a situation where the option’s strike price equals the current market price of the underlying security.

AVA (Asset value adjustment) – A non-cash adjustment to a company’s balance sheet used to reflect the estimated fair value of its assets.

AVAIL (Availability) – The percentage of a company’s currently available assets for lending, investing, or other purposes.

B/L or BOL (Bill of lading) – A document that lists the goods being shipped and the terms of the shipment.

BAC (Bank of America Corporation) – This entry on our accounting abbreviation list refers to one of the largest banks in the United States.

BAL (Balance abbreviation) – The amount of money still owed on debt or the difference between two accounts.

BCA (Bankruptcy Code Amendment) – The United States Congress passed a law in 2005 that significantly changed the Bankruptcy Code.

BEPS (Base erosion and profit shifting) – The Organization for Economic Co-operation and Development launched a global initiative to address the problem of multinational companies shifting profits to low-tax jurisdictions.

BI (Business income) – Income earned by a business from its operations.

BK  (Abbreviation for bookkeeping) – Creating records for business transactions in a ledger. The manual bookkeeping tasks can easily be replaced with accounting automation.

BO (Business organization) – The term refers to a company, partnership, or sole proprietorship.

BOD (Board of directors) – This entry in our accounting acronyms glossary describes the body that is responsible for governing a company.

BOLI (Bank-owned life insurance) – Life insurance owned and controlled by a bank.

BOP (Balance of payments) – A statement that summarizes all the transactions between a country and the rest of the world over a specific period.

BR (Balance rate) – The interest rate charged on a loan or note when the debt balance is not paid in full.

BS or B/S (Abbreviation for balance sheet) – It’s one of the essential company accounting abbreviations. A financial statement that summarizes a firm’s assets (possessions), liabilities (debts), and owner or shareholder equity at a specific moment.

BVPS (Book value per share) – This refers to the per-share book value of a business based on the shareholders’ equity.

C&F (Cost and freight) – A term used in international trade to describe the terms of sale under which the seller agrees to deliver goods to the buyer’s designated shipping port, and the buyer agrees to pay the cost of transportation.

CA (Abbreviation for checking account) – A bank account used for depositing and withdrawing cash. Note that this is one of the accounting abbreviations that could have multiple uses, as evidenced in the upcoming entries. 

CA (Cash accounting) – A method of accounting in which revenue and expenses are recorded when cash is received or paid.

CA (Current assets) – Those assets where one year is the longest period to turn them into cash. This is frequently cash, inventory, or accounts receivable.

CAB (Capital acquisition budget) – A budget used to track the money spent on capital assets, such as equipment and buildings.

CAGR (Compound annual growth rate) – A measure of a company’s average yearly growth rate, investment, or another economic variable over a specific period.

CAPEX (Capital expenditure) – The purchase of long-term assets such as property, equipment, or technology.

CBI (Confidential business information) – Information considered confidential because it could harm the company if it were to be disclosed to the public.

CCC (Collateral control center) – This is one of the banking-related accounting acronyms on our list, referring to the department at a bank responsible for managing and monitoring the bank’s collateral.

CD (Certificate of deposit) – A certificate issued by a bank that indicates that the holder has deposited a certain amount of money in the bank for a specific period of time.

CDS (Credit default swap) – A financial contract that protects against the default of a debt issuer.

CECL (Current expected credit loss) – A new accounting standard that requires banks to estimate the lifetime losses on all of their loans.

C (Cash flow) – The amount of money or cost generated due to company activities (sales, manufacturing, etc.) over time.

CFC (Controlled foreign corporation) – This term on our accounting abbreviation list refers to a foreign corporation controlled by US shareholders and subject to US taxation.

CFD (Contract for difference) – A financial contract that allows investors to bet on the difference between a security’s current and future prices.

CFTC (Commodity Futures Trading Commission) – A US government agency responsible for regulating the commodities market.

CFO (Chief financial officer) – The senior executive in a company responsible for managing its financial affairs.

CGT (Capital gains tax) – A tax charged on the profits from the sale of assets.

CI (Certificate of incorporation) – A document filed with a state government to create a corporation.

CIF (Cost, insurance, and freight) – Shipping term that refers to the cost of shipping goods plus the cost of insurance and freight.

CL (Current liabilities) – Liabilities that are due and payable within one year.

CLF (Cumulative loss factor) – This entry in our accounting acronyms glossary describes a measure of the amount by which a company’s net losses have exceeded its shareholders’ equity.

CLO (Collateralized loan obligation) – A type of security created by pooling together a group of loans and then selling shares in the security to investors.

CM (Cash management) – The process of managing a company’s cash resources to ensure they are used in the most efficient way.

CMA (Certified management accountant) – A designation awarded by the Institute of Management Accountants to individuals who have met specific requirements in management accounting.

CMV (Current market value) – This is the value of a financial instrument at the moment. 

COB (Close of business) – This accounting abbreviations entry refers to the end of the business day.

COD (Cash on delivery) – A payment method used for online or mail transactions.

COGS (Cost of goods sold) – The amount of money spent to acquire or produce the goods a company sells.

COL (Controlling officer liability) – A type of liability incurred by a company’s officers or directors if they are found to have acted negligently or in bad faith in the company’s management.

COSO (Committee of Sponsoring Organizations of the Treadway Commission) – A committee comprised of representatives from various professional organizations responsible for developing guidance on internal control.

CONS (Consolidated financial statements) – This is an abbreviation for statement that combines the financial results of two or more entities (divisions or subsidiaries) into a single statement. Consolidation accounting is the method used for preparation of these financial statements.

CONT (Continuing operations) – Operations that are ongoing and expected to generate future revenue and income.

CORP (Corporation) – A type of business organization created when a group of individuals comes together to form a company. These entities rely on corporate accounting. 

CP/CPA (Certified public accountant) – These accounting acronyms describe a designation awarded to individuals who have met the requirements of the CPA program, which is administered by the American Institute of Certified Public Accountants.

CPI (Consumer price index) – A measure of the average change in the prices of goods and services purchased by consumers.

CPU (Cost Per Unit) – The amount a company spends to produce one unit of a product.

CR (Credit) – An accounting entry that can result in a decrease or an increase in assets, liabilities, and equity on the company’s balance sheet, depending on the transaction. When utilizing the double-entry accounting technique, there will be two recorded entries for every event: a credit and a debit.

CRC (Corporate recovery consultant) – A professional who assists companies with financial difficulty.

CS (Cost-sharing) – This accounting abbreviations list entry signifies an arrangement where two or more parties agree to share the cost of a project or activity.

CT (Capitalization table) – A table that shows the ownership of a company’s equity shares.

CTA (Chartered accountant) – A designation awarded to individuals who have met the requirements of the CTA program.

CVA (Cumulative voting agreement) – An agreement between two or more shareholders that provides for the cumulative voting of their shares.

CWC (Certified working capital) – A certification issued by a financial institution to certify that a company has sufficient working capital to meet its current obligations.

D&A (Depreciation and amortization) – These accounting abbreviations refer to the two accounting methods accountants use to allocate the cost of a company’s assets over their useful lives.

DAF (Deferred acquisition costs) – Costs associated with the acquisition of a company but deferred and amortized over time.

DAR (Director and officer liability insurance) – Insurance that protects the company’s directors and officers from personal financial losses if they are sued for wrongful decisions or actions.

DBA (Doing business as) – A term used to indicate that a company operates under a name other than its legal name.

DBFOM (Design, build, finance, operate, and maintain) – A business model in which a company contracts with another party to design, build, finance, operate, and maintain one or more of its assets.

DC (Deferred compensation) – This accounting abbreviation list entry describes a type of compensation that is paid to employees at a later date than when it is earned.

DCF (Discounted cash flow) – A method of valuing a company or asset by estimating the amount of cash that will generate in the future and then discounting that amount by a chosen interest rate.

DEB (Debenture) – A type of debt security that a company issues to raise money and is backed by the company’s assets.

DI (Deferred income) – An abbreviation for income that is earned but not recognized as revenue until a later date.

DIP (Debt-in-place) – A type of financing used to provide a company with the funds it needs to continue its operations while it is in bankruptcy proceedings.

DIS (Disclosure) – The process of providing information to stakeholders about a company’s financial position, performance, and prospects.

DISC (Discontinued operations) – A discontinued operation is a business or segment of a company that has been disposed of or is classified as held for sale.

DMT (Debt management team) – This entry in our accounting abbreviations list refers to the team responsible for managing a company’s debt.

DOL (Department of Labor) – A government department responsible for administering labor laws in the US.

DPA (Deferred prosecution agreement) –  A type of agreement entered into by a company and the government in which the company agrees to certain conditions, such as paying a fine or implementing corporate reforms, in exchange for having criminal charges against it deferred.

DR (Accounting abbreviation for debit) – An accounting entry in which assets or liabilities are more significant on a company’s balance sheet.

DR (Derivative) – This is one of the accounting abbreviations describing a financial instrument that derives its value from the performance of another asset or group of assets. Derivative accounting is used for these financial instruments. 

E&O (Errors and omissions) – This refers to a type of insurance that protects a company against financial losses resulting from mistakes or omissions in the performance of its duties.

EA (Enrolled agent) – The IRS defines an enrolled agent as someone who works for a company that serves as the tax advisor to its customers.

EBIT (Earnings before interest and taxes) – This is one of the multiple accounting acronyms referring to earnings. A measure of a company’s profitability is calculated without subtracting the interest expense and income taxes from its earnings.

EBITDA (Earnings before interest, taxes, depreciation, and amortization) – A measure of a company’s financial performance that excludes the effects of interest payments, income taxes, depreciation, and amortization.

EBITDAR (Earnings before interest, taxes, depreciation, amortization, and rent) – A measure of a company’s financial performance that excludes the effects of interest payments, income taxes, depreciation, amortization, and rent.

ECON (Economics) – The study of how people use scarce resources to satisfy their needs and wants.

EFT (Electronic funds transfer) – The transfer of funds between bank accounts by means of electronic media.

EI (Employment insurance) – A government-sponsored program that provides financial assistance to unemployed individuals.

EOI (Expression of interest) – This accounting abbreviations entry refers to a document that a company submits to indicate its interest in participating in a bidding process.

EP (Equity partner) – A person or company that has invested capital in a partnership and is entitled to a share of the profits and losses of the partnership.

EPS (Earnings per share) – A measure of a company’s financial performance that considers the number of shares of common stock outstanding.

EQ(Equity) – The value of a company’s assets minus its liabilities.

ER (Exchange rate) – The price of one currency in terms of another currency.

ESOP (Employee stock ownership plan) – A retirement plan that allows employees to own the company’s stock shares.

EV (Enterprise value) – The total value of a company’s assets minus the total value of its liabilities.

EX/EXP (Expense) – These accounting acronyms describe the money a company spends in pursuit of revenue or the costs of running a business.

FA (Fixed assets) – Long-term and will almost certainly benefit a firm for more than a year, such as real estate, land, or large machinery.

FA (Financial accounting) – The process of recording, classifying, and summarizing a company’s financial transactions to prepare financial statements.

FASB (Financial Accounting Standards Board) – The organization responsible for setting accounting standards in the US.

FATCA (Foreign Account Tax Compliance Act) – A US law that requires foreign financial institutions to report information about their US clients to the IRS.

FCPA (Foreign Corrupt Practices Act) – Another government-related accounting abbreviations list entry, this term refers to a law that prohibits US companies from engaging in bribery or other corrupt practices abroad.

FDI (Foreign direct investment) – The investment of capital in a foreign country to control the operations of the company that receives the investment.

FDIC (Federal Deposit Insurance Corporation) – A government agency that provides deposit insurance to banks and thrifts.

FE (Fixed expenses) – The expenses that remain constant within a firm’s budget, such as mortgages, insurance, salaries, and some utilities.

FFE (Furniture, fixtures, and equipment) – A company’s tangible assets used in the operation of its business.

FIFO (First in, first out) – A method of inventory accounting that assumes that the first items to be added to inventory are also the first items to be sold.

FII (Foreign institutional investor) – This accounting abbreviation list entry refers to a person or company investing in securities outside their home country.

FIN (Finance) – The management of money and other financial assets. It’s important to understand the difference between accounting and finance.

FLOAT (Floating rate) – A type of interest rate that is adjusted periodically to reflect changes in market conditions.

FMV (Fair market value.) – The price at which a willing buyer and a willing seller agree to sell a good or service under ordinary circumstances.

FPA (Financial performance analysis) – Examining a company’s financial statements to assess its financial health and performance.

FRN (Floating rate note) – A type of bond that pays a variable interest rate that is adjusted periodically to reflect changes in market conditions.

FV (Future value) – The value of a current asset at a future time, under an assumed growth rate.

GAAP or US GAAP (Generally accepted accounting principles) – These accounting acronyms describe the accounting standards used in the US.

GCI (Gross carrying amount) – The total cost of an asset, less any depreciation or amortization that has been recorded.

GDP (Gross domestic product) – A measure of a country’s economic output that considers the value of all goods and services produced within the country.

GL (General ledger) – The principal accounting record of a company, which contains all of its financial transactions.

GNP (Gross national product) – The value of all the goods and services produced in a country, including the value of goods and services produced by its citizens overseas.

GPM (Gross profit margin) – The percentage of revenue a company earns after accounting for the cost of goods sold.

GS (Government securities) – This accounting abbreviations list entry denotes a type of investment issued by the United States government.

GST (Goods and services tax) – A tax levied on selling goods and services.

HA (Held-for-sale assets) – Assets that a company has decided to sell that are no longer used in its normal business operations.

HEPS (Headline earnings per share) – A measure of a company’s profitability that considers all of its earnings, including those not from continuing operations.

HTM (Held-to-maturity securities) – They are purchased to be held until maturity.

IASB (International Accounting Standards Board) – The organization that sets international accounting standards.

ICFR (Internal control over financial reporting) – The measures a company takes to ensure that the financial statements for all users of accounting information are accurate and reliable.

IFRS (International Financial Reporting Standards) – This accounting acronyms list entry refers to the set of accounting standards used in most countries around the world.

IMA (Institute of Management Accountants) – A professional organization that promotes and supports the practice of management accounting.

IMF (International Monetary Fund) – A global organization that promotes international monetary cooperation and financial stability.

INV (Inventory) – The items a company holds to be sold or used to produce goods and services.

IOSCO (International Organization of Securities Commissions) – An organization of securities regulators from around the world.

IRA (Individual retirement account) – A retirement account that is available to taxpayers in the United States.

IRC (Internal Revenue Code) – Another one of the government-related accounting abbreviations, this is the federal law that governs the taxation of individuals and businesses in the US.

IRS (Internal Revenue Service) – The government agency responsible for administrating the Internal Revenue Code.

IPO (Initial public offering) – The process by which a company sells shares of its stock to the public for the first time.

IS (Income statement) – The income statement abbreviation expresses the financial paper, which reveals the incomes and expenses of a business at a specific time. 

K (The accounting abbreviation for thousand) – (as in $1,000).

LBO (Leveraged buyout) – A transaction in which a company is acquired using a significant amount of borrowed money.

LLC (Limited liability company) – A business entity that combines a corporation’s limited liability with a partnership’s tax flexibility. One of the most common terms from our accounting abbreviation list. 

LTD (Limited) – A term used to identify a company with limited capital.

LTL (Long-term liabilities) – The company’s debts to third-party creditors that can be paid beyond 12 months.

LTIP (Long-term incentive plan) – A compensation program that provides employees with incentives to achieve long-term goals.

M&A (Mergers and acquisitions) – The process of buying, selling, or combining businesses.

MC (Management consulting) – Providing advice to companies on how to improve their business operations. Organizations often hire accounting consultants that specialize in certain areas they want to improve.

MD&A (Management’s discussion and analysis) – This entry in our accounting acronyms glossary denotes a section of a company’s financial statements that provides information about the company’s operating performance and financial condition.

MER (Merger) – The combination of two or more businesses into a single entity.

MM (The accounting abbreviation for million).

MTM (Mark-to-market) – Mark-to-market accounting is a method to determine the value of an asset that can fluctuate over time.

NAPA (The National Association of Public Accountants) – A professional association representing public accountants’ interests in the United States.

NASDAQ (National Association of Securities Dealers Automated Quotations or the Nasdaq Stock Market).

NET (Net income) – A measure of a company’s profitability calculated by subtracting its expenses.

NI (Net income) – A business’s total earnings are often referred to as net profit. Net income is the difference between gross revenue and total cost, and it’s one of the most important items from our accounting acronyms glossary.

NOL (Net operating loss) – A loss that a company experiences from its operations after accounting for depreciation and other tax expenses.

NOPAT (Net operating profit after tax) – The profit a company generates from its operations after accounting for depreciation and other tax expenses.

NYSE (The New York Stock Exchange). 

OE (Equity and owner’s equity) – The difference between equity and debt is that equity investment is a loan to the company in exchange for an ownership interest. The owner’s stake in the firm is usually expressed as a percentage of stock. 

OCF (Operating cash flow) – The cash that a company generates from its normal business activities, excluding any cash that is from investing or financing activities.

OPEX (Operating expenses) – This accounting abbreviations list entry mentions the expenses that a company incurs in its regular business operations, such as salaries, rent, and utilities.

P&L (Profit and loss) – One of the financial statement abbreviations, this one shows how much money a company has earned (profit) or lost (loss) during a specific period. Note that there is a difference between accounting profit and economic profit

PA (Another public accountant acronym) – A licensed person practicing accounting in the US.

PAT (Profit after tax) – A business’s total amount of earnings after all its taxes are deducted.

PBC (Professional body corporate) – A type of business entity used in certain countries outside the United States.

PLC (Public limited company) – A business entity similar to a corporation but has fewer restrictions on the number of shareholders it can have.

PP&E (Property, plant, and equipment) – Company’s physical assets used to produce products or provide services.

PSU (Public sector unit) – This accounting acronyms list entry refers to a government-owned corporation or enterprise.

PV (Present value) – The value of a sum of money today when a chosen interest rate discounts it.

R&D (Research and development) – The process of designing, testing, and creating new products or services.

RCS (Accounting abbreviation for reclass) – In accounting, a reclass or reclassification is an entry in the journal that moves money from one general ledger account to another.

REIT (Real estate investment trust) A company that owns and operates a portfolio of real estate assets. These companies use real estate accounting. 

ROA (Return on assets) A measure of how profitable a company is relative to its total assets.

ROE (Return on equity) – A measure of how profitable a company is relative to the money that shareholders have invested in it.

ROI (Return on investment) This accounting abbreviations list entry denotes the amount of money a company earns in relation to its investments.

ROS (Return on sales) – The percentage of a company’s revenue earned as profit.

S-CORP (Subchapter S corporation) – These individuals buy parts of a company and form a partnership to run it. This structure has several advantages over other types of LLCs, including the ability to be taxed as a partnership rather than as a corporation, which is advantageous because it reduces “double taxation.”

SEC (The Securities and Exchange Commission) – A government agency responsible for regulating the securities industry in the US.

SEP (Simplified employee pension plan) – This accounting abbreviations glossary entry is used for a type of retirement plan available to self-employed individuals.

SOX (The Sarbanes-Oxley Act) – A law enacted in 2002 to improve the accuracy and reliability of financial information reported by public companies.

SUB (Subsidiary) – A company that is owned by another company.

SWIFT (The Society for Worldwide Interbank Financial Telecommunication) – A consortium of banks that operates a global network for exchanging financial messages.

VE (Variable expenses) – Costs of doing business that vary, such as credit fees and increased production costs as sales grow.

VAT (Value-added tax) – One of the most widely known accounting abbreviations, this one describes the type of sales tax assessed on the value of goods and services.

VC (Venture Capital) – Money invested in early-stage businesses in hopes of achieving a high return on investment.

WACC (Weighted average cost of capital) – The average cost of financing company’s assets, weighted by the amount of debt and equity each type of financing represents.

XFER: (The accounting abbreviation for transfer).

Y/E (The accounting abbreviation for year-end) – Signifies the company’s closing month of the accounting year.

Z-score (Also known as a standard score) – A measure of a company’s financial stability calculated by considering various financial ratios.

The Bottom Line 

There you have it—all the important financial and accounting abbreviations explained! Whether you’re just starting in the accounting degree jobs world or looking to brush up on your knowledge, this glossary will serve as a valuable resource. Happy studying!

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