Finance terms, explained.

An accrual records expense or revenue in the period incurred, even if cash has not yet moved.

Adverse media screening searches news and public sources for financial crime or reputational risk signals.

BAI2 is a standard cash management transmission format US banks use to deliver previous-day account activity and balances.

Bank reconciliation compares the cash balance on bank statements to the general ledger cash account and explains every difference.

CAMT.053 is an ISO 20022 XML bank-to-customer statement message with structured payment references.

Customer due diligence is the baseline collection and verification of customer identity and risk information.

A close calendar lists tasks by business day minus (BD) relative to period end with owners and dependencies.

A deposit in transit is recorded in the general ledger before the bank credits the account on the statement.

Enhanced due diligence adds deeper verification and monitoring for higher-risk customers.

A false positive is a screening hit that does not actually refer to the customer being screened.

Flux analysis compares account balances period over period to highlight material changes requiring explanation.

The four-eyes principle requires two qualified individuals to review a decision before it takes effect.

Intercompany reconciliation ensures due-to and due-from balances between legal entities eliminate to zero.

A journal entry records debits and credits to adjust the general ledger with approval and audit trail.

Know Your Customer is the process of verifying identity, ownership, and risk of a customer before providing financial services.

Maker-checker requires the person who creates a transaction to differ from the person who approves it.

Materiality is the threshold above which a misstatement or variance could influence decisions of financial statement users.

Month-end close is the controlled process of finalizing balances, journals, and disclosures for a reporting period.

MT940 is a SWIFT message type that delivers end-of-day bank statement lines for reconciliation.

An outstanding check has been recorded in the GL but has not yet cleared the bank statement.

A politically exposed person holds a prominent public position or is a close associate, warranting extra scrutiny.

Perpetual KYC continuously monitors customer data and events instead of relying only on periodic reviews.

Prepaid amortisation spreads prepaid expenses over the periods they benefit.

A customer risk rating summarizes AML/CFT risk from geography, product, activity, and screening results.

Sanctions screening compares customer and counterparty names against government and vendor watchlists.

Source of funds documents where money used in a relationship originated and whether it is consistent with the customer profile.

SOX controls are internal controls over financial reporting that US public companies must document and test.

A suspense account temporarily holds transactions until they can be classified to the correct GL account.

A transposition error swaps digits in an amount; the difference between incorrect and correct entries is divisible by nine.

An ultimate beneficial owner is a natural person who ultimately owns or controls a legal entity customer.