Acct Vocabulary

Everything a company owns, including cash, accounts receivable (money a company is going to receive, see below), property and goods.

• Assets 

• Balance Sheet 

Everything that a company owes to others, like loans and mortgages.

• Debit 

• Liabilities

A document that records a company’s assets and liabilities at a certain moment in time. If we’re talking about a public company, it also shows the shareholders’ equity (how much the shareholders own).

The balance sheet is based on the accounting equation:

assets = liabilities + owner’s equity

The balance sheet is important for potential investors because they can see how the company is doing.

• Assets 

• Balance Sheet 

An entry that shows what a company spends. Debits are recorded on the left side of an account.

An accounting system in which each transaction is recorded as both a credit and a debit, an asset and a liability.

An accounting system in which each transaction is recorded as both a credit and a debit, an asset and a liability.

• Double Entry

• liability

An amount of money before taxes are deducted

• Gross

• Net

An amount of money that is left after taxes have been paid.

• Net

• Profit

The total amount of money a company receives from the services or products it sells. The revenue is higher than the profit, because in order to calculate the profit, you need to first see the costs of doing business.

• Revenue

• Capital

Cash and funds, but also machinery and tangible assets that can contribute to earning more money, like computers, company vehicles, etc. Intangible assets like expertise or reputation are not considered to be capital.

• Capital

• Cash Flow