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In accounting, where numbers and concepts intertwine to portray the financial health of organizations and individuals, a glossary of terms stands out as a guiding beacon. This glossary is an essential resource for those wishing to navigate the complex and often obscure waters of accounting language. 


The systematic allocation of the amortizable value of an intangible asset over its useful life, meaning the recognition of the asset’s value loss over time.


All assets, rights, and resources controlled by the company with economic value.

Self-assessment of VAT

It takes place when the person acquiring the services or products is responsible for settling the VAT.

Balance Sheet

A report that clearly and accurately demonstrates the financial position of a company

Trial Balance

Instrumental financial tools used to visualize the total debits and credits of accounts, along with their respective balances.

Tax Incentive

Tax incentives granted by the government through laws, decrees, or provisional measures to reduce the tax burden.


It is the science that studies and interprets financial data.

Certified Accountant

A certified professional responsible for recording and controlling all transactions to which each company is subject.

Management Control

Processes and tools aimed at obtaining information to monitor and influence the performance of an organization.

Tax Credit

Amount of money in favor of the taxpayer, i.e., a tax deduction.

“Profit and Loss Statement (P&L)

A report that shows the details of Income and Expenses during a specific period of time.


The decrease in the value of an asset due to its use, natural wear and tear, or obsolescence

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

Allows the analysis and comparison of the performance and/or profitability of a company or between companies.


A document, either in paper or electronic format, that serves as proof of a transaction.

Cash Flow

The movement of cash inflows and outflows of a company’s cash.


Value recognized by financial accounting and may arise when there is the sale of a company or a portion of it.

Value Added Tax (VAT)

Tax that applies to consumption, taxing products, services, commercial transactions, and imports.

Corporate Income Tax (CIT)

It applies to the income of companies engaged in commercial, industrial, or agricultural activities.

Vehicle Excise Duty

Tax applied to the purchase of motor vehicles.


List of a company’s goods and/or raw materials.


Investment with the expectation of future benefit.


Interest cost, measured in percentage, resulting from borrowing a certain amount of capital.

Accounting entry

Financial transaction recording.

Gross Profit

Profit After Deducting Variable Costs.


Final result obtained after deducting all expenses and taxes from gross profit.

International Accounting Standards (IAS/IFRS)

A set of international accounting standards aimed at standardizing procedures.

Financial Transactions

Operations carried out by companies with the aim of generating financial resources.


Set of obligations and debts made to finance organizational activity.

Net Worth

Represents the value that the partners or shareholders have in the company and is calculated using the difference between assets and liabilities.

Chart of Accounts

Set of operations that represent the economic and financial activity of a company arising from its activities.


Money set aside to cover or prevent expenses that the company may incur.


It is the total amount of money from a company’s sales of goods or services.

Cash Basis

A company’s financial system for recording payments, expenses and investments.

Profit reserves

Accounts made up of company profits that have not been distributed to partners and shareholders.

SNC (Accounting Standardisation System)

It’s a model that has
purpose, the preparation of accounts based on International Accounting Standards.

Amortisation rate

It consists of a settled percentage of the capital that was actually granted by the bank.

Credit sales

It consists of selling this debt obligation to a third party.