Plain words for accounting terms

Recording income or a cost in the month it belongs to, even if the money moves later. You meet it when a bill for this month arrives next month. Kept's salary run accrues what is owed to staff before payment. Other accruals can be entered as journal entries and reversed in the following period. Read more

A structured file of accounting records that an authority may request. Kept does not produce an FTA-specific audit file yet. It can export the trial balance, general ledger and ageing reports for your accountant. Read more

A statement of what the business owns, what it owes and what belongs to the owners on one date. Banks, auditors and the corporate tax computation all start from it. Kept prepares it from the ledger in the IFRS for SMEs shape. Read more

Checking that the bank balance in your books agrees with the balance on the statement. You meet it every month when the statement lands. In Kept you import the statement, match each line to an invoice, payment or other entry, and reconcile the account. Read more

The list of accounts every transaction is posted to, such as sales, rent or bank. It has to exist before anything can be posted. You or your accountant set it up in Kept when the company is created. Read more

The working that turns the accounting profit into taxable income by adding back or taking away specific items. You meet it once a year after the statements are ready. In Kept each adjustment carries a recorded reason. A person reviews the computation and files the return outside Kept. Read more

A document that reduces or cancels an invoice you already issued, for example after a return or a pricing error. The original invoice is never edited. Kept issues credit notes linked to the invoice they correct. Read more

A document a supplier sends to add to an amount already billed, or one you send to ask a supplier to reduce theirs. You meet it when a price or quantity changes after the invoice. In Kept it is stored and entered like any other supplier document and confirmed by a person. Read more

Spreading the cost of an asset such as a vehicle or a laptop over the years it is used, rather than counting it all in the month it was bought. You meet it when preparing year-end statements. Kept calculates monthly depreciation in its fixed asset register and records disposal; the entries appear in the statements. Read more

Issuing invoices as structured data sent through an accredited service provider rather than as a PDF. It is a UAE requirement being introduced. Kept builds the structured document and keeps its versions, but the service is not switched on yet. Read more

A sale that carries no VAT and for which you generally cannot recover the VAT on related costs. Certain financial services and residential property are common examples. Kept records the treatment a person chooses; it does not decide it for you. Read more

The complete record of every posted entry, account by account. Accountants and auditors read it to see where a figure came from. In Kept posted entries are never edited; a correction is a reversing entry that stays visible beside the original. Read more

The VAT you pay on purchases for your business. You can usually recover it on your VAT return, subject to the rules. Kept collects it from confirmed supplier postings into the right box of the return. Read more

A single posting with equal debits and credits, the basic unit of the books. Every invoice, payment and adjustment ends up as one. In Kept a posted journal entry is reversed rather than edited or deleted. Read more

What each account held on the day you started using a system. You meet it when switching software part-way through a year. In Kept you enter an opening balance sheet at your cut-over date, and the whole opening can be reversed if nothing has been settled against it. Read more

The VAT you charge customers on your sales. You pay it to the FTA through your VAT return. Kept takes it from the invoices you issued and shows which invoices make up the figure. Read more

The rules that decide which country a sale is treated as taking place in, and so whether UAE VAT applies. You meet it when selling to or buying from abroad. Kept records the treatment a person chooses; it does not decide the place of supply for you.

A statement of income and costs over a period, ending in a profit or a loss. It shows whether the business made money. Kept prepares it from the ledger, and the corporate tax computation starts from its profit. Read more

An amount set aside for a cost you expect but cannot yet pin down exactly, such as end-of-service benefits or a doubtful debt. You meet it at year end. Kept calculates each employee's end-of-service gratuity from the configured formula and posts it to the employee benefit provision. Read more

A rule under which the buyer, not the supplier, accounts for the VAT, typically on services imported from abroad. You meet it when a foreign supplier sends an invoice without UAE VAT. In Kept a person chooses the treatment and Kept produces both sides of the entry. Read more

A corporate tax provision that may apply to eligible UAE businesses, subject to conditions set in law. You meet it when preparing your corporate tax return. Kept lets you record the treatment in the computation but does not decide whether you qualify. Read more

An invoice carrying the details UAE VAT law requires, such as your tax registration number and the VAT charged. Customers need it to recover their input tax. Kept issues tax invoices and simplified invoices with sequential numbers. Read more

A list of every account with its balance, where total debits equal total credits. It is the first check that the books add up. Kept produces it from the ledger at any date. Read more

The periodic return, form VAT 201, that reports output tax, input tax and the amount due or refundable. You file it by the deadline the FTA sets. Kept computes it from the books and shows the entries behind each box; a person files it. Read more

A sale that is taxable but charged at the zero rate, such as many exports. Unlike an exempt supply, you can generally still recover the VAT on related costs. Kept records the treatment a person chooses and reports it in the return. Read more