ACC

Accounts Payable

Short-term liabilities that you owe to your suppliers/vendors

Accounts Receivable

Money your customers owe you for the sale of goods and services

Accrual Accounting

Recording transactions in the periods in which they occur, rather than in the periods in which cash is received or paid. Also called the matching rule.

Accumulated Depreciation

The amount of recorded depreciation over time

Administrative Expenses

Amount spent for general administrative activities

Assets

Resources you own that have value

Balance Sheet

A type of financial statement that shows the company's assets, liabilities, and equity at a specific date

Book Value

Difference between the cost of any depreciable asset and its related accumulated depreciation

Cash

Cash includes money you have on hand and in the bank

Cash Equivalents

Short-term, highly liquid investments such as treasury bills, commercial paper, and money market funds

Cash Flow Statement

A type of financial statement that shows the inflows and outflows of cash for a particular accounting period

Common Stock

Total amount paid in by stockholders for the shares they purchase

Cost of Sales

Expenses directly linked to the production or sale of a product or service (raw materials, labor, and other expenses)

Current Assets

Assets that can be converted into cash within one year

Current Liabilities

Liabilities that are due within one year

Depreciation

The accrued expense recorded for using the asset; it decreases the value of the asset over time

Dividends

Money paid to the owners out of the company's after tax-profits. This is a form of compensation for investing in the company

Equity

Ownership claim on a company's total assets

Fixed Assets

Long-term assets that you plan to use for your business such as property, machinery, or vehicles

Fixed Expenses

An expense that DOES NOT increase or decrease in proportion with changes in volume of production or sales; it stays the same within a range of activity

Gross Profit/Gross Margin

Net Sales minus Cost of Sales

Income Statement

A type of financial statement that shows the income and expenses for a particular accounting period

intangible Assets

Noncurrent assets that do not have physical substance such as patents, copyrights, or trademarks

Interest

Payment for borrowing money

Interest Payable

Interest accrued on loans and credit

Inventory

Physical goods that you purchased and plan to resell or goods you plan to use to make/build something

Land

Recorded at purchase price

Liabilities

Money you owe to your creditors

Long-term Investments

Stocks, bonds or savings that you plan to keep for more than one year

Long-term Liabilities

Liabilities that you owe to creditors where the due date is greater than one year

Net Income

Amount by which revenues exceed expenses.

Net Loss

Amount by which expenses exceed revenues.

Net Sales

Gross sales minus Returns & Allowances

Notes Payable

Liabilities that you owe to creditors; can be short-term or long-term

Overhead

Expenses of a business which support the production or service, but cannot be directly traced to the product or service

Owner's Equity

Claims of the owner on the assets of the business; Remainder of what it is leftover after liabilities are subtracted from assets

Paid in Capital

The surplus of what an owner pays on the stated value of a stock certificate

Prepaid Expenses

Goods or services that you paid prior to use

Principal

The original amount of money borrowed or invested

Profit/Income

Amount remaining from revenue after all expenses have been deducted

Pro-forma Statements

Financial statements comprised of numbers that are calculated based on historical performance and known future events

Retained Earnings

Current and cumulative year's net profits or losses minus any dividends declared

Sales

The amount you charged to your customers for the goods or services you provided

Selling Expenses

Amount spent for sales and marketing activities

Taxes Payable

Amounts owed to local, state, and federal government

Unearned Revenue

Cash received before services are performed

Variable Expenses

An expense that increases or decreases in proportion with increases or decreases in volume of production or sales