Terms starting with
Original Cost
Original cost refers to the initial purchase price of an asset, including all expenditures necessary to bring it to usable condition. Under the historical cost…
READ MOREOrder of Liquidity
Order of liquidity is the arrangement of assets on a balance sheet based on how quickly they can be converted into cash. Typically, cash appears…
READ MOREOverapplied Overhead
Overapplied overhead occurs when the allocated manufacturing overhead costs exceed the actual overhead incurred during a period. This difference usually arises from using predetermined overhead…
READ MOREOutstanding Shares
Outstanding shares refer to the total number of a company’s shares currently held by investors, including institutional holders and company insiders. This figure excludes treasury…
READ MOREOther Comprehensive Income (OCI)
Other Comprehensive Income represents revenues, expenses, gains, and losses that are excluded from net income on the income statement. These items are recorded directly in…
READ MOREOff-Balance Sheet Items
Off-balance sheet items are assets or liabilities not recorded directly on the balance sheet but still impact financial health. Examples include operating leases, joint ventures,…
READ MOREOperating Lease
An operating lease is a rental agreement where the lessee uses an asset without owning it. It doesn’t appear on the balance sheet under older…
READ MOREObsolescence
Obsolescence occurs when an asset becomes outdated or no longer useful due to new technology, market changes, or wear and tear. In accounting, obsolete inventory…
READ MOREOutsourced Accounting
Outsourced accounting involves hiring external professionals or firms to handle bookkeeping, payroll, tax filing, and financial reporting. It allows businesses to reduce costs, access specialised…
READ MOREOperating Cycle
The operating cycle is the time it takes for a company to purchase inventory, sell products, and collect cash from customers. It measures the efficiency…
READ MOREOpening Balance
The opening balance is the amount carried forward in an account at the start of a new accounting period. It’s either a debit or credit…
READ MOREOverhead
Overhead refers to indirect costs not directly tied to producing goods or services but necessary for business operations. This includes rent, administrative salaries, insurance, and…
READ MOREOperating Expenses
Operating expenses are the recurring costs of running a business, excluding the cost of goods sold. Examples include rent, utilities, salaries, and marketing. OPEX appears…
READ MOREOwner’s Equity
Owner’s equity is the residual interest in the assets of a business after deducting liabilities. It represents the owner’s claim on the company and includes…
READ MOREOperating Income
Operating income measures profit from a company’s core business operations, excluding interest and taxes. It's calculated by subtracting operating expenses from gross profit. It reflects…
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