Accounting Basic Terms

Accounting Basic Terms

1. Balance Sheet

   • The Balance Sheet refers to the financial statement of a company in which assets, liabilities, and owner´s equity are listed each one in different sides.  Assets = Liabilities + Equity

2. Accounts

   • There are two types of accounts:  1. Accounts Payable: is a short-term debt payment which needs to be paid to avoid default, comes as liabilities. 2. Accounts Receivable: is the payment that a company will be receiving from its costumers who have purchased goods or services.

3. Accrual Accounting

   • Is when transactions are recorded in the books as they occur even if the product has not been paid.

4. Credit

   • the ability of costumers to get goods or services before payment, payment will be done after.

5. Debit

   • When service or goods are purchased, immediately money will be taken away from the account

6. Net

   • The sum of positive and negative amounts.

7. Capital

   • Financial assets owned by a company, original amount.

8. Cash Flow

   • Is the amount of cash that a company receives or gives out by the way of payments.

9. Revenues

   • Are assets that come into the company in exchange for goods and services.

10. Expenses

    • occur when resources are consumed in order to make revenues.

11. Accounts Receivable

    • Is when a costmer promises to pay for the goods or service sold in the future.

12. Depreciation

    • shows that an asset like a building is being used up.

13. Appreciation

    • Is the increase of the value of an asset over time.

14. Interest

    • Is rental charge for the use of money.

15. income Statement

    • summarizes a firms´ revenues and expenses for a period of time.

16. Rent

    • a payment made to an owner of some place of residence in a repeating time.

17. Entity Assumption

    • This says that business records must be kept and annotated away from personal records.

18. Costs of Goods Sold

    • Describe the cost of the goods that are produced by a company and will be solved.

19. Assets

    • Are objects that have economic value owned by a comany.

20. Liabilities

    • Is a company´s financial debt or many that arises in business operations.

21. Owner´s Equity

    • represents the owner´s residual interest in the assets of the business.

22. Tax

    • the tax is an amount of money put by the government to people added to some goods and services.

23. Transactions

    • is the action in which buying or selling a good or service, a business deal. 

24. Loss

    • An amount of money that a business or organization loses

25. Investment

    • is when you are investing on putting money on an object for profit

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