GLOSSARY

Bad debts

Money owed to you that you can't collect

Balance

The amount of money remaining in an account. The total of your money in the bank after accounting for all transactions (deposits and withdrawals) is called a "balance".

Balance sheet

An important business document that shows what a business owns and owes as of the date shown. Essentially a "balance sheet" is a list of business assets and their cost on one side and a list of liabilities and owners' equity (investment in the business) on the other side with the amount for each. The liabilities include all that the business owes.

The balance sheet looks at two financial aspects, ASSETS - which the company owns, and LIABILITIES which the company owes. Whilst the Profit & Loss account is the culmination of a years activities, the Balance Sheet looks at the company's assets and liabilities on one day - in effect a snapshot.

Bank draft

A written instruction to a bank's agent to pay a sum of money to the person specified on the draft. A safe and convenient way of remitting money overseas.

Bank reconciliation

A comparison between the bank's record of transactions and the record of the firm's cash book. After taking into account such items as unpresented cheques and bank charges etc., the two records should show an identical balance.

Bankrupt

A debtor, who has volunteered or been forced to appear before a Bankruptcy Court and has been judged insolvent, because s/he has insufficient assets to meet the demands of all creditors.

Benchmarking

A method of comparing the relative performance range of different businesses. Benchmarking is an effective way of identifying areas for business improvement.

Benchmark

A reference or measurement standard for comparison, the performance level being recognised as the standard of excellence for specific business processes.

Best Practice

Superior performance within a function or process, or methods that lead to exceptional performance.

Bill of sale

A document under seal, which formally transfers ownership of property specified in the document from the borrower to the lender, until such time as the debt has been paid in full.

Bona fide

In good faith, honestly, without fraud, collusion or participation in wrong doing.

Bond

Payment by a tenant to a landlord before the tenant takes over the premises and from which the landlord may be able to deduct arrears of rent or the cost of rectifying damage.

Bookkeeping

The process of recording business transactions in the accounting records

Break-even point

The point at which volume of sales is enough to cover all costs.

Bridging loan

A loan to provide short-term finance, usually to buy property or land, where the loan is to be cleared by longer-term borrowing, or the sale of assets.

Budget

A plan for the future, expressed in money terms.

Business Angel

An individual who invests in businesses, especially start-up businesses.

Business name

The name of a business officially listed in Companies House Register of Business Names.Balance Sheet

 

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