Accounting Terms & Their Meanings

Accountants have their own lingo. Accounting terms are full of acronyms and abbreviations that laymen don't understand. It can be intimidating to talk to accountants when you don't know the proper terminology.

AP

AP is short for accounts payable. Accounts payable is the money owed to a vendor or creditor for services performed or goods purchased.

AR

AR stands for accounts receivable. The money owed from a debtor usually for services performed or goods sold is recorded as a receivable.

GL

The GL or general ledger is a collection of all liability, revenue, assets, expenses and accruals. Most general ledgers record these with a series of numbers called GL codes.

WIP

Partially completed products that are waiting to be completed before being transferred to finished inventory are called Work in Progress or WIP.

Accrual Basis

Accrual basis accounting recognizes revenue when earned, rather than when the receivable is paid. Expenses are recorded when incurred instead of when payment is sent.

References

• NYSSCPA.org