203 Accounting Abbreviations [2024 Complete List A-Z]

In the ever-evolving world of finance and business, you might often find yourself buried under a heap of paperwork full of terms that sound like a foreign language.

This is where accounting abbreviations come to your rescue, serving as your unique passport and unlocking the riddles of the financial world.

These condensed versions of cumbersome technical terminologies are economical, easy to remember, and universally understood, making them an essential tool in your business arsenal.

When you tackle accounting chores or go through financial data analysis, encountering unfamiliar abbreviations can appear daunting.

This friendly guide is aimed at helping you understand crucial accounting abbreviations to make your finance dealings less puzzling and more efficient. So let's remove the fear factor and face those intimidating-looking financial terms confidently.

200+ Accounting Abbreviations

Navigating the world of finance becomes much easier when you understand the language. With 200+ accounting abbreviations, you’ll be ready to decipher any financial statement or business meeting.

These abbreviations encapsulate complex concepts in short, memorable forms and are essential for anyone involved in accounting or finance.

A/C - Account/Current

The abbreviation A/C stands for Account or Current. This typically signifies a financial account currently in use or operation.

AB - Accumulated Benefits

Accumulated benefits refer to the total retirement benefits an employee has earned at a particular time.

ABS - Asset-Backed Securities

Asset-backed securities (ABS) are financial products backed by a loan, lease, or receivables against assets other external to real estate and mortgage-backed securities.

ACCT/ACGT - Accounting

ACCT or ACGT refers to accounting, a systematic process of recording, summarizing, and analyzing financial transactions.

AD - Accounting Department

AD stands for the Accounting Department. This is the department within an organization responsible for financial record keeping and reporting.

ADJ - Adjustment

'Adjustment' or 'ADJ,' in accounting terms, refers to an entry made in the books of accounts related to the correction or alteration of revenues and expenses.

ADA - Allowance for Doubtful Accounts

ADA means Allowance for Doubtful Accounts. This contra-asset account reduces the total receivables reported on the balance sheet, which is expected to turn into bad debts.

ADR - American Depositary Receipt

An American Depositary Receipt (ADR) signifies ownership in shares of foreign stocks that trade on U.S. exchanges as domestic equities.

ADT - Auditing

Auditing or ADT is a systematic examination and verification of the company's accounts or financial system by an independent professional(often a CPA).

AGI - Adjusted Gross Income

Adjusted gross income (AGI) refers to your gross income—i.e., wages, dividends, capital gains—minus specific deductions allowed by IRS law like student loan interest or alimony payments.

AGM - Annual General Meeting

Annual General Meeting (AGM) is a yearly gathering of shareholders to discuss and vote on corporate affairs, including financial reports.

AICPA - American Institute of CPAs

The American Institute of Certified Public Accountants (AICPA) is a membership body that establishes ethical standards, auditing standards for private companies, NGOs & governments.

AIM- Alternative Investment Management

Alternative Investment Management (AIM) involves managing investments in asset classes other than stocks, bonds, and cash-like private equity.

AIT - Adjusted for Taxes

Adjusted for Taxes (AIT) means that the given figures have been modified to account for the effects of taxation.

ALCO - Asset-Liability Committee

The Asset-Liability Committee (ALCO) overlooks the institution's risk management, mainly focusing on credit and model risk management, emphasizing interest rate risk exposures.

ALLL - Allowance for Loan and Lease Losses

Allowance for Loan and Lease Losses (ALLL) is a reserve set aside by a financial institution to estimate uncollectible loan amounts.

AM - Accounting Manager

An Accounting Manager (AM) oversees daily accounting tasks, prepares financial statements, monitors general accounting practices, assists with various audits and budget forecasts, etc.

AML - Anti-Money Laundering

Anti-Money Laundering (AML) refers to various regulations set up to prevent illegal practices of generating income through illicit activities.

AMT - Alternative Minimum Tax

The Alternative Minimum Tax(AMT) is a tax calculation designed by the IRS to ensure that high-income earners pay at least a minimum amount of tax.

AUM - Asset Under Management

Asset Under Management (AUM) is a financial term signifying the total market value of all investment funds managed by a portfolio manager or investment company.

AP - Accounts Payable

Accounts Payable(AP), in simple terms, represent your business's obligations or debts: what you owe your suppliers or vendors in return for goods or services rendered.

APA - Accounting Principles Applied

Accounting Principles Applied (APA), as the name suggests, encompasses the general rules and guidelines applied while crafting financial statements within an organization.

AR - Accounts Receivable

Accounts Receivable(AR), quite the opposite of Accounts Payable(AP), stands for money owed to your business by your customers after goods or services have been delivered but not yet paid for.

ARR – Adjusted Rate of Return

Adjusted Rate of Return(ARR) is an altered version of rate return utilized to evaluate a proposed investment using complex calculations based on estimation rather than fixed data points.

AS - Accounting Standard

Accounting Standard (AS) defines the framework of rules for financial accounting every publicly traded company must follow in its financial statements.

ASC – Accounting Standards Committee

The Accounting Standards Committee (ASC) is responsible for creating, reviewing, and updating the standards by which financial transactions are recorded and reported.

ATM – At the Money

At The Money (ATM) describes an options trading situation when an option's strike price equals the asset's current market price.

AVA – Asset Value Adjustment

Asset Value Adjustment (AVA) typically refers to a downward adjustment made to the value of a company's assets based on current market conditions.

AVAIL – Availability

In the banking sector, Availability (AVAIL) generally refers to funds available for immediate use or withdrawal from an account.

B/L or BOL – Bill of Lading

A Bill of Lading (B/L or BOL) is a legal document between a shipper and carrier detailing the type, quantity, and destination of the goods being shipped.

BAC – Bank of America Corporation

Bank of America Corporation (BAC) is one of the most prominent multinational investment banks and financial services companies headquartered in Charlotte, North Carolina.

BAL – Balance abbreviation

"Balance," abbreviated as BAL, represents the amount of money in a financial repository, such as checking accounts, at any given moment.

BCA - Bankruptcy Code Amendment

Bankruptcy Code Amendment (BCA) usually signifies an update or change to existing bankruptcy legislation.

BEPS – Base Erosion and Profit Shifting

Base erosion and profit shifting (BEPS) refer to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

BI - Business income

Business Income(BI), often called business revenue, involves all income obtained from your business operations before subtracting expenses.

BK - Bookkeeping

Bookkeeping(BK), one pillar of accounting, centers around recording all financial transactions like purchases, sales, receipts & payments by an individual or organization properly.

BO - Business Organization

Business Organizations (BO), or business entities, refer to firms carrying out commercial activities for profit motives, including corporations, partnerships & sole proprietorships.

BOD - Board Of Directors

The board of directors(BOD), elected by shareholders, are duty-bound individuals overseeing the organization's general direction; their primary task mainly focuses on providing strategic planning & policy-making decisions.

BOLI - Bank-Owned Life Insurance

Commonly known as BOLI - this exclusive life insurance policy purchased by banks where they function as both beneficiary & policy owner offers them a tax-efficient way to offset benefit costs.

BOP - Balance Of Payments

Balance Of Payments(BOP) mirrors records matching all economic transactions, especially imports & exports between residents(including government) vs non-residents within a specified period.

BR - Balance Rate

Balance Rate(BR), or interest rate, signifies the percent charged when you borrow money/ earned when you deposit money into saving accounts.

BS/B/S- Balance Sheet

The primary three parts necessary when talking about financial statements come down next: Income statement(P&L account), Statement Of Cash Flows(SOCF)& Balance Sheet(BS/B/S). It summarizes the company's assets(owned), liabilities(owed)& equity(at a specific point).

BVPS- Book Value Per Share

Assessing a company's valuation frequently brings up 'Book Value Per Share', revealing the amount shareholders would theoretically receive if all assets liquidated/debts were repaid today itself.

C&F-(Cost And Freight)

Cost And Freight(C&F): A term in international trade where the seller covers cost until merchandise ships safely into the vessel instruct- the buyer is solely responsible, including insurance cost if recommended.

CA - Checking Account

Checking Account(CA): Essentially being a demand deposit account with savings institutions/banks permitting number withdrawals/deposits along with allowing recurring payments availability through electronic means

CA-Cash Accounting

Cash Accounting(CA): Simple widely-used method stating revenue recognized when cash is physically positioned within a hand; similarly, expenses are recorded consequently while paying them off.

CA - Current Assets

Current assets (CA) are balance sheet items that represent the value of all assets that can reasonably expect to be converted into cash within one year.

CAB - Capital Acquisition Budget

A Capital Acquisition Budget (CAB) is a budget that outlines capital expenditures — expenses incurred for long-term physical assets such as property, plant, and equipment.

CAGR - Compound Annual Growth Rate

The Compound Annual Growth Rate (CAGR) is a useful measure of growth over multiple periods. It represents the rate at which an investment would have grown if it had grown at the same rate every year and reinvested profits at the end of each year.

CAPEX - Capital Expenditure

Capital Expenditure (CAPEX) refers to funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment. It's often used to undertake new projects or investments by firms.

CBI - Confidential Business Information

Confidential Business Information (CBI) refers to information in possession of U.S. government agencies that may be withheld from the public because disclosure could harm business interests or trade secrets.

CCC - Collateral Control Center

A Collateral Control Center(CCC), in finance operates as part of the loan and credit risk management system, ensuring proper securement and representation of every collateral for loans given.

CD - Certificate of Deposit

A Certificate of Deposit(CD) is a product offered by banks and credit unions that offers an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.

CDS - Credit Default Swap

Credit Default Swaps(CDS) are financial instruments used as a hedge and speculation against debt default. The buyer pays premiums until expiry or a default event occurs.

CECL - Current Expected Credit Loss

The Current Expected Credit Losses (CECL) model is an accounting standard allowing banks and financial institutions to recognize expected credit losses rather than currently employed "incurred loss."

CFC - Controlled Foreign Corporation

In U.S. taxation law, controlled Foreign Corporations (CFCs) are foreign corporations with more than 50% of control lies with U.S. shareholders.

CFD - Contract for Difference

Contracts for Difference (CFDs) are derivatives trading which enable you to speculate on financial markets such as shares, forex, indices, etc., without owning the underlying asset.

CFTC- Commodity Futures Trading Commission

Commodity Futures Trading Commission(CFTC), headquartered in Washington D.C., is an independent federal agency established in 1974 regulating futures & options markets.

CFO- Chief Financial Officer

The Chief Financial Officer(CFO) takes care of all financial actions within an organization, including tracking cash flow & financial planning while also analyzing the company's strengths and weaknesses and proposing corrective actions.

CGT- Capital Gains Tax

Shortened as CGT, Capital Gains Tax implies the tax levied on the profit realized from the sale of property or investment.

CI- Certificate of Incorporation

In legal terms, a Certificate of Incorporation(CI) is a license granted by the state government giving birth to the corporation under specifically defined rules described within the certificate.

CIF- Cost, Insurance, and Freight

Also called C.I.F., this term represents the selling price inclusive of the cost of freight & insurance charges paid by the seller upon transporting goods via sea route.

CL- Current Liabilities

Current liabilities(CL), also short-term liabilities, are the company's debts payable within one fiscal year, e.g., account payables, taxes payables & creditors dues.

CLF- Cumulative Loss Factor

Cumulative Loss Factor(CLF), often used in banking sectors, measures & standardizes the severity of loss borrowers experience during default.

CLO-Collateralized Loan Obligation

A collateralized Loan Obligation(CLO) is a security backed by pool receivable debts. CLO notes serve investors who might prefer risks+cash-flows different various types of loans pooled together

CM-Cash Management

Cash Management (CM) signifies the corporate finance function managing a firm's liquidity(cash balance and other liquid resources)&financial strategy.

CMA- Certified Management Accountant

Certified Management Accountant(CMA) is a professional certification credentialing demonstrating abilities in management accounting fields.

CMV- Current Market Value

Current Market Value (CMV)-an asset's current worth if sold under market conditions.

COB-Close Of Business

Close Of Business (COB)—a helpful business term indicating end operating hours businesses can receive/respond to actions/transactions taken the day

COD-Cash On Delivery

For purchases made online/e-commerce platforms, Cash On Delivery(CoD), a popular payment method, allows payment time delivery.

COGS-Cost Of Goods Sold

Cost Of Goods Sold (COGS)-direct costs producing goods/services sold firm. Among critical metrics, subtract sales revenue, calculate gross profit calculate net profit.

COL - Controlling Officer Liability

Defining Controlling Officer Liability (COL), refers to the legal responsibility of business officials for the activities they control within their corporate roles.

CONS - Consolidated Financial Statements

Consolidated Financial Statements (CONS) are the combined financial statements of a parent company and its subsidiaries, providing an overall look at the financial health of the entire group.

CONT – Continuing Operations

Continuing Operations (CONT) relates to business operations expected to continue in the foreseeable future, as seen in income statements.

CORP - Corporation

A Corporation (CORP) is an organization, often comprising multiple businesses, authorized by law to act as a single entity and recognized.

CP/CPA - Certified Public Accountant

A Certified Public Accountant (CP/CPA) is a high-level accounting professional who meets specific educational and experience requirements from their country’s respected regulatory body.

CPI - Consumer Price Index

The Consumer Price Index (CPI) measures average changes in prices consumers pay for a 'standard' package of goods and services over time.

CPU - Cost Per Unit

Cost Per Unit(CPU) expresses the cost or price associated with one unit of a particular product or service.

CR - Credit

In accounting terms, a 'credit' or 'CR' transaction indicates an increase in liability and owner's equity accounts while decreasing asset or expense accounts.

CRC- Corporate Recovery Consultant

Corporate Recovery Consultants (CRCs) assist companies experiencing significant problems, like bankruptcy proceedings, and guide them toward recovery using strategic plans.

CS - Cost-Sharing

Cost-Sharing(CS), or matching funds, refers to the distribution of costs between multiple parties within any agreement or project.

CT- Capitalization Table

A capitalization table(CT) is essentially a spreadsheet that analyzes a company's percentages of ownership, equity dilution, and equity value in each round of investment by founders, investors, and other owners.

CTA - Chartered Accountant

A Chartered Accountant (CTA) is a designation granted to accounting professionals in many countries worldwide.

CVA - Cumulative Voting Agreement

A cumulative Voting Agreement (CVA) is a method of voting shareholders may use to influence the composition of a corporate board of directors. The idea behind CVA is that minority shareholders can have a more significant influence by pooling their votes together.

CWC - Certified Working Capital

Certified Working Capital (CWC) is an unofficial certification showing that a corporation or small business owner has sufficient liquid assets to continue operations and meet short-term obligations.

D&A - Depreciation and Amortization

Depreciation and Amortization (D&A) are two types of expense recognition that spread out the cost of an asset over its useful life. While depreciation refers to tangible assets like buildings or machinery, amortization usually involves intangible ones such as patents or trademarks.

DAF - Deferred Acquisition Costs

Deferred Acquisition Costs (DAF) are expenses related to acquiring new customers or renewing existing insurance contracts during a period but get deferred over subsequent periods. These costs might include underwriting, commissions, promotional, and miscellaneous acquisition expenses.

DAR - Director and Officer Liability Insurance

Director and Officer Liability Insurance (DAR), often known as D&O insurance, offers liability coverage for company managers to secure them against claims that may arise due to alleged wrongful acts when acting as an executive or director.

DBA - Doing Business As

DBA stands for "doing business as." It's a legal term used when the name under which a business operates differs from its registered legal name. A company might use multiple DBAs as part of its business strategy.

DBFOM- Design, Build, Finance, Operate, Maintain

Design-Build-Finance-Operate-Maintain (DBFOM) are projects that bundle design and construction services with operations & maintenance support under one contract agreement. This contracting approach incentivizes contractors to build high-quality, cost-effective facilities in the long run.

DC- Deferred Compensation

Deferred Compensation (DC) refers to arrangements where portions of an employee's income are paid out at a date post which that income is earned, like retirement plans & pension schemes.

DCF- Discounted Cash Flow

Discounted Cash Flow(DCF) is a measure used extensively in finance for estimating the value of an investment based on its future cash flows and their riskiness.

DEB- Debenture

Debenture(DEB), in corporate finance, refers to long-term debt instruments issued by companies with fixed maturity dates & interest rates for raising capital.

DI- Deferred Income

Deferred Income(DI), often known as unearned or prepaid revenue, refers to cash a company receives before it provides products or services.

DIP- Debt-In-Possession

Debt-In-Possession(DIP) refer to loans taken out by companies during bankruptcies where creditors allow bankrupt companies continued access to credit lines on furnishing debtor-in-possession financing statement.

DISC- Disclosure & Discontinued Operations

Disclosure(DISC), in a financial context, means providing investors with all significant information influencing investment decisions. At the same time, Discontinued Operations represent financial results separate from continuing operations when parts of the business have been sold off/disposed of.

DMT- Debt Management Team

The Debt Management Team (DMT) manages an organization's outstanding debts to ensure sound financial stability and sustainability.

DOL- Department of Labor

The Department of Labor (DOL) is a U.S. government agency tasked with enforcing federal labor standards and promoting workers' welfare.

DPA- Deferred Prosecution Agreement

A Deferred Prosecution Agreement (DPA) is a settlement strategy under which a prosecutor allows the defendant to avoid prosecution by meeting specific requirements.

E&O- Errors and Omissions

Errors and Omissions(E&O) refer to professional negligence, including mistakes, oversights, or carelessness in providing professional services.

DIS(Disclosure)

Disclosure denotes making new or secret information known - widely used in legal documents, business contracts, and accounting practices.

CT(Capitalization Table)

A capitalization table (CT) details shareholders' equity ownership, dilutions, and value estimation over time.

CR(Credit)

Credit(CR) represents the trust allowing one party to borrow funds from another with a promise for future repayment.

CRC(Corporate recovery consultant)

A Corporate Recovery Consultant(CRC) aids businesses in identifying performance improvement opportunities while navigating financial distress or bankruptcy.

DBFOM(Design, Build, Finance, Operate and Maintain)

DBFOM encapsulates five primary tasks - design, build, finance, operate & maintain under project lifecycles, especially for large infrastructural projects.

Read More About Accounting Cycle [Definition, Timing, & 8 Important Steps]

DEF(Deferred Income)

Deferred Income represents payments received for goods or services yet to be provided. It's recorded as a liability until delivery completion.

DIP(Debt-in-place)

Debt-in-place(DIP) signifies the amount of debt a company carries at a given point on its balance sheet.

CPU (Cost Per Unit)

Cost Per Unit(CPU) measures the average total cost to produce one product unit, including fixed and variable costs.

EA- Enrolled agent

An Enrolled Agent(EA) is a federally-authorized tax practitioner with technical expertise in taxation & can represent taxpayers before the IRS.

EBIT- Earnings before interest and taxes

Earnings Before Interest and taxes (EBIT), an effective metric measuring a company's profitability, excluding the impact of the tax regime and capital structure

ECON-Economics

Economics(ECON) studies production, distribution & consumption patterns involves examining metrics like inflation rates & employment levels.

EFT-Electronic funds transfer

Electronic Funds Transfer(EFT), digital transfers from one bank account to another, eliminating usage of checks or cash

EI-Employment Insurance

Employment Insurance(EI) program supports unemployed workers by providing temporary financial assistance during job-search or upgrading skills.

EOQ-Economic Order Quantity

Economic Order Quantity (EOQ), inventory management formula determining optimum order quantity minimizing total inventory costs, including holding costs & shortage costs

FASB– Financial Accounting Standards Board

Financial Accounting Standards Board(FASB), a nonprofit organization creating accounting standards known as General Accepted Accounting Principles(GAAP)

EPS– Earnings per Share

"Earnings per Share"(EPS) – proper financial metric measuring profitability distributed across each outstanding share of common stock

CPA– Certified Public Accountant

Certified Public Accountant(CPA) is the designation for qualified accountants who've passed the exam and met specific state licensing requirements.

ROI– Return on Investment

Return on Investment(ROI), evaluates efficiency/effectiveness of various investments; ratio between net profit&cost; high ROI= profitable investment

EOI - Expression of Interest

An 'Expression of Interest'(EOI) indicates an intention to negotiate commercially with another party.

EP - Equity Partner

An Equity Partner (EP) refers to a partner in a partnership who owns equity shares of the firm's profits and losses.

EPS - Earnings per Share

'Earnings per Share' (EPS) is a portion of the company's profit allocated to each outstanding share of common stock.

EQ - Equity

Equity (EQ) represents ownership interest held by shareholders in an entity; it's your business’s assets minus its liabilities.

ER - Exchange Rate

Exchange Rate (ER) is the value of one currency for the conversion to another foreign currency.

ESOP - Employee Stock Ownership Plan

An Employee Stock Ownership Plan (ESOP) is a retirement plan which allows employees ownership stakes in the company.

EV - Enterprise Value

Enterprise Value(EV) measures a company's total value, including shares, debt, and cash, often used in buyouts or takeovers.

EX/EXP - Expense

Expenses(EX/EXP) are costs incurred during business operations, subtracted from revenues to determine net income.

FA - Fixed Assets & Financial Accounting

Fixed assets(FA), or long-term or capital assets, are assets like machinery, land, or buildings expected to be productive for more than one year. "FA" can also stand for Financial Accounting, which is the field that deals with the preparation of financial statements.

FATCA – Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act(FATCA) discourages tax evasion by Americans through offshore banks.

FCPA – Foreign Corrupt Practices Act

Foreign Corrupt Practices Act(FCPA) mitigates corruption by punishing companies for unlawful overseas dealings, especially bribery.

FDI – Foreign Direct Investment

Foreign Direct Investment(FDI) refers to an investment from a party in one country into a business in another.

FDIC – Federal Deposit Insurance Corporation

Federal Deposit Insurance Corporation(FDIC), offers insurance cover on bank deposit accounts to reassure trust and encourage stability within the financial system.

FE – Fixed expenses

Fixed expenses(FE) are costs that do not change regardless of production levels; examples include rent and insurance.-

FFE – Furniture, Fixtures and Equipment

Labeled as FFE are tangible movable items that outfit an institution’s building: chairs, desks, etc.

FII – Foreign institutional investor

A foreign institutional investor (FII) invests significant sums in stocks, bonds, and other investment vehicles while being situated abroad.

GNP – Gross National Product

Gross National Product(GNP) measures the value produced by residents over a specific period, irrespective of where production took place.

GST – Goods and Services Tax

A Goods And Services Tax(GST) replaces multiple taxes, such as VAT, customs duties, etc., into a single, comprehensive tax regime.

HA – Held-for-sale assets

Held-for-sale assets(HA) are no longer required for operations and are hence expected to be sold off within year.

HEPS- Headline earnings per share.

Headline earnings per share(HEPS)- It’s calculated using adjusted earnings after tax divided by weighted average shares outstanding.

GL- General ledger.

A general ledger (GL)- This master account contains raw data used in preparing financial statements, including balance sheet items like revenue and expenses

HM- Held-to-maturity securities.

Held-to-maturity securities(HM)- Deemed long-term investments since they're held until the maturity date upon which the principal amount will be returned

IASB- International Accounting Standards Board

International Accounting Standards Board(IASB)- This body develops International Financial Reporting Standards, including guidance on how these standards should be applied

ICFR- Internal control over financial reporting

Controls over internal financial reporting -- procedures designed to ensure that reports prepared internally are accurate and reliable according to their intended purpose.

IFRS - International Financial Reporting Standards

International Financial Reporting Standards (IFRS) are international accounting standards stating how particular types of transactions and events should be reported in financial statements.

IMA - Institute of Management Accountants

The Institute of Management Accountants (IMA) is a professional organization primarily consisting of management accountants, financial professionals, and business leaders in the United States.

IMF - International Monetary Fund

The International Monetary Fund (IMF) is an international financial institution that fosters global monetary cooperation, secures global financial stability, and promotes sustainable economic growth.

INV - Inventory

INV stands for Inventory. Inventory refers to the array of goods or materials a business has on hand. Inventories could include raw materials, partially completed work, or finished goods ready for sale.

IOSCO - International Organization of Securities Commissions

The International Organization of Securities Commissions (IOSCO) is an organization regulating the world’s securities and futures markets across multiple countries.

IRA - Individual Retirement Account

An Individual Retirement Account (IRA) is an investing tool individuals use to earmark funds for retirement savings with favorable tax conditions.

IRC - Internal Revenue Code

The Internal Revenue Code (IRC) is a comprehensive set of tax laws enacted by the federal government. It regulates taxation in the United States.

IRS - Internal Revenue Service

The Internal Revenue Service (IRS) is a government agency responsible for collecting taxes and administering the Internal Revenue Code(IRC), our main body of federal tax law in the United States.

IPO - Initial Public Offering

An Initial Public Offering(IPO) refers to the process by which a privately held company becomes publicly traded on a stock exchange.

IS- Income Statement

An Income Statement(IS), or profit & loss statement, summarizes income & expenses incurred during a specific period, indicating how revenues are transformed into net earnings.

K- Thousand

In accounting and finance, 'K' often represents one thousand dollars. For example, $50K denotes USD 50,000

LBO- Leveraged Buyout

A leveraged buyout(LBO) involves an entity purchasing another with mostly borrowed funds, intending to pay through future cash flows, or selling assets from the acquired entity.

LLC- Limited Liability Company

A Limited Liability Company(LLC) is a corporate structure specific to America where owners aren't personally liable for company's debts or liabilities beyond their investment.

LTD- Limited

LTD stands for limited, meaning shareholders have limited liability regarding the company's debt according to their percentage ownership.

LTL- Long-term Liabilities

Long-term liabilities(LTL) are liabilities due beyond one year or over the normal operating cycle if longer than a year.

LTIP- Long-term Incentive Plan

A long-term incentive plan(LTIP) refers to reward systems used by companies to reward top-level executives or employees based on the company's long-term performance measures.

M&A– Mergers and Acquisitions

Mergers and Acquisitions (M&A) refer to consolidations between two companies, resulting in the transfer of ownership.

MC– Management Consulting

Management Consulting (MC) refers to helping organizations improve their performance through professional advice on solving problems or creating value.

MD&A – Management's Discussion and Analysis

Management's Discussion and Analysis (MD&A) is a section in a company's annual report wherein management discusses various aspects of the company’s financial performance.

MER - Merger

A Merger (MER) is a corporate strategy involving combining two companies into one entity to create economies of scale.

MM - Million

In accounting terminology, MM is used to denote "Million."

MTM - Mark-to-market

Mark-to-Market(MTM), is an accounting practice wherein securities are valued at their current market price.

NAPA – National Association of Public Accountants

The National Association of Public Accountants (NAPA) is an association that brings together public accounting professionals for advocacy, networking and continued learning opportunities.

NASDAQ – National Association of Securities Dealers Automated Quotations

In its simplest sense, the National Association of Securities Dealers Automated Quotations (NASDAQ) represents an American stock exchange platform.

Read More About Accounting Automation 2023 [Pros, Cons & How To Get Started]

NET/NI- Net Income

Net Income(NI or NET) comprises the total earnings (or profit) acquired by a business after subtracting all expenses, including taxes and operational costs.

NOL-Net Operating Loss

A Net Operating Loss(NOL) occurs when a company's allowable tax deductions exceed its taxable income within a given period.

NOPAT– Net Operating Profit After Tax

Net Operating Profit After Tax(NOPAT) calculates a company's profit potential if it doesn’t have any debt or tax advantages.

NYSE-The New York Stock Exchange.

The New York Stock Exchange(NYSE), one of the largest stock exchanges globally, allows investors to buy and sell shares of publicly held companies.

OE-Equity

Equity(OE), also known as owner's equity or shareholder equity, represents the residual interest in the assets after deducting liabilities.

OCF–Operating Cash Flow

Operating Cash Flow(OCF) refers to the total cash generated by a company’s regular business operations.

OPEX –Operating Expenses

Operating Expenses(OPEX) are outflows from normal business operations such as salaries, utilities, rent, etc.

P&L–Profit and Loss

A Profit and Loss(P&L) statement presents revenues, costs, & expenses over some specific period

PA-Public Accountant

A Public Accountant(PA) provides services like bookkeeping, tax prep & planning, etc., for the general public.

PAT-Profit After Tax

Profit After Tax(PAT) indicates the actual profitability of the enterprise after accounting statutory obligations.

PBC - Professional Body Corporate

Professional Body Corporate (PBC) is an organization that represents a profession and protects its standards and ethics.

PLC – Public Limited Company

A Public Limited Company (PLC) is a type of corporation permitted to offer its shares to the public. Often, these entities are listed on a stock exchange, allowing shareholders to buy and sell shares freely.

PP&E – Property, Plant, and Equipment

Property, Plant, and Equipment (PP&E), or fixed assets, are tangible items of substantial value owned by a company that are used in its operations for more than a year. These items typically include buildings, land, machinery, vehicles, and furniture.

PSU – Public Sector Unit

A Public Sector Unit (PSU) is a government-owned corporation or agency. Often divided into various sectors such as telecom or health care provision.

PV - Present Value

Present Value (PV) refers to the current worth of future sums of money based on a designated rate of return. This metric is crucial in determining whether future earnings may justify potential investments.

R&D - Research & Development

Research & Development (R&D) signifies any activity undertaken by businesses aimed at creating new products or improving existing services. It constitutes one of the essential components fostering innovation.

RCS - Reclassification

Reclassification (RCS) is an accounting process where items are shifted between different categories within financial statements based on changes in use or purpose.

REIT – Real Estate Investment Trust

Real Estate Investment Trusts (REITs) own, operate, or finance income-generating real estate projects across various property sectors.

ROA – Return on Assets

Return on Assets (ROA) is determined by dividing net income by total assets invested. Essentially, it shows how efficiently management uses its assets to generate profit.

ROE - Return on Equity

Return on Equity (ROE) is similar to ROA but instead examines how efficiently profit can be generated from shareholders’ equity, calculated by dividing net income by average shareholder’s equity.

ROS - Return on Sales

Return on Sales(ROS), often called operating profit margin, measures the efficiency at which profits are produced per dollar of sales revenue.

S-CORP - Subchapter S Corporation

A Subchapter S Corporation (S-Corp) is a type of corporation that meets specific Internal Revenue Code requirements, giving it the benefit of passing income directly to shareholders and avoiding double taxation.

SEC - The Securities and Exchange Commission

The Securities and Exchange Commission (SEC) is a U.S. federal agency responsible for protecting investors, maintaining fair, orderly, efficient markets, and facilitating capital formation.

SEP - Simplified Employee Pension Plan

A Simplified Employee Pension (SEP) is a retirement plan for self-employed people and small-business owners.

SOX - The Sarbanes-Oxley Act

The Sarbanes-Oxley Act (SOX) is a law enacted in 2002 designed to protect investors by improving the accuracy and reliability of corporate disclosures in financial statements.

SUB - Subsidiary

A subsidiary or a sub-company is a company controlled by another company that owns more than 50% of its voting stock.

SWIFT - The Society for Worldwide Interbank Financial Telecommunication

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides global secure communication standards and services to financial institutions.

VE - Variable Expenses

Variable expenses are costs that change in direct proportion to the output volume or activity level.

VAT Value-added tax

Value Added Tax (VAT) is an indirect tax levied on goods and services consumed. It applies to each production stage based on each location's value added.

VC – Venture Capital

Venture Capital (VC) refers to investment funds investors provide to startups or small businesses with long-term growth potential.

WACC – Weighted Average Cost of Capital

The Weighted Average Cost of Capital(WACC) represents the company's cost to finance its assets, considering both debt and equity financing sources.

XFER – Transfer

In accounting terminology, transfer (TFR or XFER) often refers to when funds are moved from one account to another within the same financial institution or between two separate institutions.

Y/E – Year-end

Year-end (Y/E), as its name suggests, signifies the end of a fiscal year, which may not align with the calendar year due to different fiscal practices across various businesses. Most reports wrap up at this time frame.

Z-score – Standard Score

A Z-score or Standard Score indicates how many standard deviations an element is from the mean. In finance, it's often used in credit scoring.

FAQs About Accounting Abbreviations

Conclusion

Understanding accounting abbreviations is critical to navigating the financial landscape, whether you're a business owner, stakeholder, or just curious.

These shortcuts do more than fast-track your financial literacy; they unveil the hidden business operations and economics patterns.

By mastering these abbreviations, you empower yourself with a valuable toolkit to interpret financial jargon and gain a profound comprehension of the complex dynamics of finance.

Return to this handy guide whenever you stumble upon unfamiliar financial terms. This considerable list doesn't merely serve as your reference tool but allies you in cracking accounting terminologies, sharpening your skills, and ultimately leading toward sound financial decision-making.