Accounting abbreviations – help you understand accounting jargon

When you start a business, you quickly discover that you need to understand accounting terms. Whether you’re dealing with your accountant, bookkeeper, or doing the bookkeeping yourself, you’ll come across accounting abbreviations. Most business owners have heard of “Accounts Payable” (AP) and “Accounts Receivable” (AR). But what about AJE? That stands for “Journal Entry Adjustment” which you’ll likely find when your accountant is ready to close your books for your business’s fiscal year.

I’ve been in business for a number of years and have compiled a list below of some of the most common accounting abbreviations and terms you’ll come across. Having this handy list available helps you focus on your business instead of spending too much time figuring out accounting terms. Even if you use accounting software like QuickBooks, it’s still helpful to familiarize yourself with these terms.

• abc: Activity-Based Costing
• AJE: Journal entry adjustment
• Pennsylvania: Accounts payable
• arkansas: Accounts receivable
• IN: asset turnover
• BED AND BREAKFAST: Beginning balance (see also: EB)
• BV:Value in books
• ECJ: Closing journal entry
• CM: Contribution Margin (= Sales minus Variable Costs)
• cogm: Cost of goods manufactured
• CR: Credit
• POLYVINYL CHLORIDE: Cost-Volume-Profit
• Dr.: Debit
• eb: Closing balance (see also BB)
• EPS: earnings per share
• Eve: Added economic value
• FIFO: First in, first out (see also: LIFO)
• heart rate: Fixed Costs (see also: VC)
• MSDS: Financial statements
• FYE: Closing of the fiscal year; (for example: FYE2010)
• GAAP: Generally Accepted Accounting Principles
• GL: Ledger
• IS: Statement of income
• I LIKE THIS: International Standards Organization
• Yo: Journal entry
• JAT: Just in time
• LIFO: Last in, first out (see also: FIFO)
• loc: Line of credit
• NEITHER: Net income
• ooh: General expenses
• IS: Earnings and loses
• P.M: Profit margin
• PCA: Process value analysis
• D.: Retained earnings
• KING: Return of investment
• SAG expenses: Selling, administrative and general expenses
• SHE: Equity
• MS: Sale price (price of goods/services sold)
• tuberculosis: trial balance
• CV: Variable Costs (see also: FC)
• WIP: Work in progress

There are many other accounting terms, but the terms above are what I have found to be a good start in helping you understand accounting.