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Glossary*
Accounting Deduction: is a deduction from accounting income which is located on a business' Income Statement.
Accounts Receivable: Also known as AR. It is a list of the outstanding Sales Invoices, usually by Customer in alphabetical order. The AR outstanding per Customer is usually by Due Date grouped by 30, 60, 90 and >90 Days outstanding. This accounting report is useful to use when collecting outstanding invoices that are past due. It is sometimes given to banks as part of lending covenants. If sales are in cash, there should not be any outstanding invoices and therefore this report would not exist.
Bank Reconciliation: It is a monthly task of comparing the bank statement with the internal records or bank general ledger account. It usually results in journal entries for bank fees, interest and expenses that may not have been recorded in the general journal account.
Business Plans: It is a comprehensive strategic and financial written plan about a business idea that can be used to acquire financing from outside sources like banks, venture capitalist, family, and potential partners. This plans organizes the idea into a document setting out a business's future objectives and strategies for achieving them.
Charitable Organization: is an organization established to carry out activities that benefit the public, primarily by addressing needs like poverty, education, or religion, and not for profit. Charitable organizations cannot distribute their income to their members or benefit private individuals. They must use their resources for charitable activities. Donations to them you can claim on line 34000, all or part of these donations, up to a limit of 75% of your net income (line 23600).
COGS: An acronym for Cost of Goods Sold. This value is found on the Income Statement under the Revenue section. It is the sum of the amounts of the direct goods and labour used to make the Finished Goods Inventory item. It is one of the values to calculate Gross Margin.
Customer Service: The assistance and advice provided by a company to those people who buy or use its products or services, usually found in a Marketing Plan.
ERP Systems: An ERP (Enterprise Resource Planning) system is a software application that integrates various business processes, like finance, HR, manufacturing, supply chain, sales, and procurement, into a single, unified platform, providing a holistic view of an organization's operations.
Forecasting & Budgets: Budgeting is a process of planning and allocating financial resources, while forecasting is the process of predicting future financial outcomes based on historical data and trends.
Foreign Exchange: is the conversion of one currency into another, eg. $1USD=$1.4301 CAD Bank of Canada month end rate Feb 28, 2025.
Health & Safety: The standard dictionary definition for Health and Safety is the regulations and procedures intended to prevent accident or injury in workplaces or public environments.
HST Remittance: In Ontario, businesses which register with Canada Revenue Agency, or which are eligible to register, can collect 13% HST from customers and recover the amount of HST they paid on business expenses.
Human Resources: is the company department charged with finding, screening, recruiting, and training job applicants, as well as administering benefits.
Inventory: In accounting there are different types of inventory such as raw materials, finished goods and work in process inventory. These inventory types are counted once a year, once a quarter or monthly depending on the business and its preferences. These inventories collect the direct costs and labour as they become finished goods.
Marketing Plan: is a plan created to accomplish specific marketing objectives, outlining a company's advertising and marketing efforts for a given period, describing the current marketing position of a business, and discussing the target market and marketing mix to be used to achieve marketing goals.
Payroll & Deductions: the process of paying a company's employees. It includes collecting the list of employees to be paid, tracking the hours worked, calculating the employee's pay, distributing the salary on time, and recording the payroll expense. In Ontario deductions can include company benefits such as EI, CPP and Income Tax.
Production Reports: a document that summarizes a company's production data, providing managers and employees with clear, detailed information about production rates, efficiency, and other key performance indicators (KPIs) to inform business decisions.
Relationship Mangement: is a strategy used by organizations to foster and maintain positive relationships with customers, partners, and other stakeholders to build loyalty and drive business growth. The term is used in the Banking Industry and it's relationship with Businesses, big and small.
ROEs: a Record of Employment (ROE) is a crucial document that summarizes an employee's work history, including earnings and hours, and is essential for employees applying for Employment Insurance (EI) benefits. Employers are required to issue an ROE when an employee experiences an interruption of earnings.
Sustainability Plan: is a roadmap outlining an organization's strategy and actions to achieve long-term goals that encompass financial, social, and environmental sustainability. It's a proactive approach to embed sustainability principles into all aspects of operations.
T4, T5, T1 T2 Tax : These are all common tax forms at different ends of the tax process. T4's are usually given by companies to employees to show the income, benefits and deductions for the calendar year. T5's are usually given by financial institutions that hold your investment or savings accounts as a T5 shows interest and investment income. T1 refers to an individual's tax return in Canada that is filed for the calendar year. T2 refers to incorporated businesses' tax return in Canada that is filed for their fiscal year, which may also coincide with the calendar year.
Tax Credit : A tax credit is applied against your tax liability. Some tax credits are non-refundable. If the credit amount is more than your tax bill, the excess credit won’t result in a refund check, but could reduce your tax bill to zero.
Tax Deduction : A tax deduction is applied against your taxable income.
Website: a set of related web pages located under a single domain name, typically produced by a single person or organization.
Year End: Fiscal year-end is the date on which a company finishes a 12-month accounting period. The fiscal year may differ from the calendar year depending on the needs of the company.
* Brought to you by Google Search, Laura Van Den Hurk, EY(Ernst & Young)
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