Financial Terms: Salaries, Expenses, Accounting, and Business Structures

Posted on Jan 23, 2025 in Economy

Salary: Money paid monthly by an employer.
Wages: Money paid by the day or the hour, usually received weekly.
Overtime: Money received for working extra hours.
Commission: Money paid to salespeople and agents – a certain percentage of the income the employee generates.
Bonus: Extra money given for meeting a target or for good financial results.
Fees: Money paid to professional people such as lawyers and architects.
Social Security: Money paid by the government to unemployed and sick people.
Pension: Money paid by a company or the government to a retired person.

Living Expenses: Money spent on everyday needs such as food, clothes, and public transport.
Bills: Requests for the payment of money owed for services such as electricity, gas, and telephone connections.
Rent: The money paid for the use of a house or flat.
Mortgage: Repayments of money borrowed to buy a house or flat.
Health Insurance: Financial protection against medical expenses for sickness or accidental injuries.
Tax: Money paid to finance government spending.
Interest: The amount paid to borrow money.

Issuing Shares or Equities: Certificates representing units of ownership of a company.
Bonds: Loans that pay interest and are repaid at a fixed future date.
Suppliers: Providers who supply goods or services on credit – that will be paid for later.

Financial Statements: Information about a company’s financial situation.
Bookkeeping: The day-to-day recording of transactions.
Accounting: Involves recording and summarizing an organization’s transactions or business deals, such as purchases and sales, and reporting them in the form of financial statements.
Creditors: People or organizations who have lent money to a company.
Auditing: Examining a company’s systems of control and the accuracy of its records, looking for errors or possible fraud, where the company may have deliberately given false information.
Internal Audit: Carried out by a company’s own accountants or internal auditors.
External Audit: Done by independent auditors who are not employees of the company.
Raw Materials: The substances and components used to make products.

Bookkeeper: Records the company’s daily transactions.
Debtors: Customers who owe money for goods or services purchased.
Partnership: A business arrangement in which several people work together and share the risks and profits.
Unlimited Liability: The partners are fully liable for any debts the business has.
Sole Trader Business: An enterprise owned and operated by a single person – also has unlimited liability for debts.
Limited Liability: The owners are not fully liable for the business’s debts. Their liability is limited to the value of their share capital, the amount of cash that the shareholders have contributed to the company.