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Accounting method that records transactions when they occur, not when cash is received or paid, matching income to the period earned and expenses to the period incurred.

Expenses incurred during a period but not yet paid; recorded as a liability on the balance sheet and recognised as an expense in the income statement.

Revenue earned during a period but not yet received in cash; recorded as an asset (receivable) and recognised as income in the statement of comprehensive income.

Cash received from customers before the service is delivered or goods are supplied; recorded as a liability and recognised as income when the obligation is fulfilled.

Payments made for expenses in advance of the period in which they are incurred; recorded as an asset and expensed as the benefit is consumed.

Amounts owed by debtors that are unlikely to be collected; estimated and recorded as an expense and a contra-asset to reduce receivables to their estimated collectible amount.

Allocation of an asset's cost evenly over its useful life; calculated as (cost minus residual value) divided by useful life in years or units.

The value at which an asset is recorded in the financial statements after deducting accumulated depreciation or impairment from its original cost.

Equity reserve used to record increases (and sometimes decreases) in the fair value of non-depreciable property, plant and equipment; not transferred to retained earnings until the asset is derecognised.

An appropriation of retained earnings created by management decision to restrict dividends; transfers do not affect total equity but show the intended use of profits.

Cumulative profits earned by the entity and not distributed to shareholders as dividends; the largest component of equity in most companies.

Distribution of additional shares to existing shareholders at no cost, funded by capitalising retained earnings or a reserve; increases share capital without raising new cash.

Dividend declared and paid during the financial year, before the financial statements are finalised; does not require shareholder approval.

Dividend declared by the board after year-end based on annual results and declared subject to shareholder approval at the annual general meeting.

Direct costs incurred to issue shares, such as legal and administrative fees; deducted from the proceeds and recorded as a reduction in equity.

Comprehensive budget comprising the operating budget (budgeted income statement), capital expenditure budget, and financial budget (cash budget and balance sheet projections).

Budget that forecasts cash inflows and outflows period by period to determine whether the entity will have sufficient cash to meet obligations and support operations.

Schedule prepared as part of the master budget showing the timing of cash collection from credit sales, using estimated collection rates by age of debt.

Schedule prepared as part of the master budget showing the timing of cash payments for credit purchases and expenses, using supplier payment terms.

Forecast of the entity's profit or loss for a future period, prepared from budgeted sales revenue, cost of goods sold and operating expenses.