Accounting Glossary
Clear, plain-language definitions of accounting, tax, and bookkeeping terms — with South African context.
Browse by Category
Tax & Compliance
10 terms
Accounting Basics
6 terms
Financial Statements
3 terms
Business Terms
4 terms
Assets & Depreciation
3 terms
Payroll & HR
3 terms
A
Accounts Payable
Accounts payable (also called creditors) is the money a business owes to its suppliers for goods or services received but not yet paid for.
Accounts Receivable
Accounts receivable (also called debtors) is the money owed to a business by its customers for goods or services that have been delivered but not yet paid for.
Amortization
Amortization is the process of spreading the cost of an intangible asset (such as a patent, trademark, or software licence) over its useful life, similar to depreciation for tangible assets.
B
Balance Sheet
A balance sheet is a financial statement that shows a business's assets, liabilities, and equity at a specific point in time, following the equation: Assets = Liabilities + Equity.
Bank Reconciliation
Bank reconciliation is the process of matching your accounting records against your bank statement to identify discrepancies and ensure your books accurately reflect your actual bank balance.
C
Capital Gains Tax (CGT)
Capital gains tax is a tax on the profit made when selling a capital asset such as property, shares, or a business in South Africa.
Cash Flow Statement
A cash flow statement is a financial report that tracks the actual movement of cash in and out of a business over a period, categorised into operating, investing, and financing activities.
Chart of Accounts
A chart of accounts is a structured list of all the accounts used by a business to classify and record financial transactions in the general ledger.
Cost to Company (CTC)
Cost to company is the total amount an employer spends on an employee, including gross salary plus employer contributions to UIF, SDL, pension fund, medical aid, and other benefits.
Credit Note
A credit note is a document issued by a seller to a buyer to reduce the amount owed, typically due to returned goods, overcharging, or an agreed discount after the original invoice was issued.
D
Depreciation
Depreciation is the systematic allocation of a fixed asset's cost over its useful life, reflecting the asset's wear and tear, obsolescence, or decline in value.
Double-Entry Bookkeeping
Double-entry bookkeeping is an accounting method where every financial transaction is recorded in at least two accounts — a debit in one and a credit in another — ensuring the books always balance.
G
General Ledger
A general ledger is the master accounting record that contains all financial transactions of a business, organised by account, forming the basis for financial statements.
Gross Salary
Gross salary is the total amount an employer pays an employee before any deductions such as PAYE tax, UIF contributions, pension fund contributions, or medical aid.
I
Income Statement
An income statement (also called a profit and loss statement) is a financial report that shows a business's revenues, expenses, and resulting profit or loss over a specific period.
Income Tax
Income tax is a direct tax levied by SARS on the taxable income of individuals, companies, and trusts in South Africa, using a progressive rate system for individuals.
Invoice
An invoice is a commercial document issued by a seller to a buyer, detailing the products or services provided, quantities, prices, and payment terms.
IRP5 Certificate
An IRP5 is an employee tax certificate issued by employers in South Africa, summarising an employee's income and tax deductions for the tax year.
P
PAYE (Pay As You Earn)
PAYE is the system through which employers deduct income tax from employees' salaries and pay it directly to SARS on their behalf each month.
Provisional Tax
Provisional tax is a method of paying income tax in advance, in two or three instalments during the tax year, rather than as a lump sum at year-end.
T
Taxable Income
Taxable income is the portion of total income on which income tax is calculated, after subtracting all allowable deductions and exemptions as defined by SARS.
Trial Balance
A trial balance is a report listing all accounts in the general ledger with their debit or credit balances, used to verify that total debits equal total credits.
Turnover Tax
Turnover tax is a simplified tax system available to South African micro-businesses with a qualifying turnover of R1 million or less per year.
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