This glossary contains terms related to accounting and financial transactions at the University of California. It is intended to provide general guidance and to support understanding of terminology as used in the Accounting Manual.

The definitions provided are for informational purposes only and are not intended to replace, modify, or supersede official University policies, procedures, contracts, or other governing documents. In the event of any inconsistency or conflict between this glossary and official University documentation, the applicable official Policy, regulation, or agreement shall control.

Users are encouraged to consult the relevant official source documents for authoritative definitions.

A-C   D-H   I-O   P-R   S-T   U-Z

A-C

Accrual: The recognition of revenue when earned and expenses when incurred, regardless of when cash is received or paid.

Accounts Payable (AP): Amounts owed to vendors or suppliers for goods or services received but not yet paid.

Accounts Receivable (AR): Amounts owed to an organization for goods delivered or services provided but not yet collected.

Asset: A resource owned or controlled by an organization that is expected to provide future economic benefit.

Audit: An independent examination of financial records and processes to ensure accuracy, compliance, and internal control effectiveness.

Budget: A financial plan that estimates revenues and expenses for a specific period.

Capital Expenditure (CapEx): Funds used to acquire, improve, or extend the life of long-term assets such as buildings or equipment.

Cash Flow: The movement of cash into and out of an organization over a period of time.

Chart of Accounts: A structured list of accounts used to classify and record financial transactions.

D-H

Depreciation: The systematic allocation of the cost of a tangible asset over its useful life.

Encumbrance: A commitment of funds for a future expenditure, such as a purchase order, that reserves part of a budget.

Expense: The cost incurred in the normal course of operations to generate revenue or support activities.

Fiscal Year: A 12-month period used for financial reporting and budgeting purposes that may not align with the calendar year.

Fund: A self-balancing set of accounts used to track specific sources of revenue and their related expenditures.

General Ledger (GL): The central record of all financial transactions for an organization.

I-O

Internal Control: Processes and procedures designed to safeguard assets, ensure accurate financial reporting, and promote compliance with policies.

Journal Entry: A formal record used to enter financial transactions into the accounting system.

Liability: An obligation owed to another party that will require future payment or settlement.

P-R

Revenue: Income earned from providing goods or services or from other operating activities.

S-T

U-Z

Variance: The difference between budgeted (or expected) amounts and actual financial results.