Remember our previous collection of Bookkeeping Words here:
Bookkeeping Words You Need to Know (Letters A to C)
We are now introducing you to bookkeeping words from letters D to H.
Debtors: People or businesses that owe you money are called debtors.
Deductible: Any expense that is marked as a business expense is called deductible. It reduces your business profits but also reduces the income tax that you will need to pay.
Depreciation: Your fixed assets reduce in value over time, how much it reduces is called depreciation.
Equity: An amount a business owner contributes to the business from their own fund minus the fund that is withdrawn from the business for personal use.
Expenses: Any kind of fund and costs that is used for the purpose of running business.
Factoring: Instantly receiving money without waiting for customers to make payments coming from a finance company.
Financial Statements: Needed for reports and income tax payments, it is made to show how poorly or well the business is doing and its actual value.
Gains and Losses: When a gain or loss in a business is coming from foreign currency transactions, selling of assets and other capital transactions.
Gross Profit: Total profit figure of a business which is usually calculated as the total revenue minus the direct cost of any sales.
General Ledger: A book of summary of the business accounts.
Hard Assets: Physical assets like land, buildings, equipment and financial assets like cash, credit, financial instruments. Hard assets are usually listed on the records of account in an organization. It is subjected to inventory and/or custodial safeguards.
Hard Costs: the actual purchase price of actual assets i.e. the purchase price of a new tractor would be the hard cost. While the soft costs are additional fees for items like when factoring-invoiced installation, prepaid and extended warranties, or service contracts for the new equipment.
Hedge: when applied in securities, it is a transaction that reduces the risk of an investment.
Hedge Fund: this is a special type of investment fund. It has fewer restrictions on the types of investments it can make. Notably it is a hedge funds ability to sell short. Also it allows for the ability to use more aggressive strategies. It is more exclusive, i.e. fewer people, usually only the wealthy, are allowed to invest in hedge funds.