College Classes

Assets

Resources a company owns (cash, inventory, equipment).

Liabilities

What a company owes (loans, accounts payable).

Equity

Owner’s claim on assets after liabilities.

Revenue

Income earned from sales or services.

Expenses

Costs incurred to generate revenue.

Net Income

Revenue minus expenses.

Accrual Basis Accounting

Recording revenues/expenses when they are incurred, not when cash changes hands.

Cash Basis Accounting

Recording only when cash is received or paid.

Double-entry system

Every transaction affects at least two accounts (debits and credits).

Financial Statements

Balance Sheet, Income Statement, Statement of Cash Flows.

GAAP

Generally Accepted Accounting Principles; standard framework for financial reporting.

GDP

Gross Domestic Product; total value of goods/services produced in a country.

Nominal vs. Real GDP

Current prices vs. inflation-adjusted.

Unemployment Rate

Percentage of labor force unemployed but seeking work.

Inflation

General rise in prices.

Deflation

General fall in prices.

Aggregate Demand (AD)

Total spending on goods/services in an economy.

Aggregate Supply (AS)

Total production in the economy.

Fiscal Policy

Government use of spending and taxes to influence economy.

Monetary Policy

Central bank control of money supply and interest rates.

Business Cycle

Expansion, peak, contraction, trough.

Opportunity Cost

The next best alternative forgone.

Comparative Advantage

Ability to produce at a lower opportunity cost.

Population

Entire group of interest.

Sample

Subset of the population.

Parameter

Numerical value that describes a population.

Statistic

Numerical value that describes a sample.

Random Variable

A variable whose values are outcomes of a random event.

Probability Distribution

Lists possible outcomes with probabilities.

Mean

Average (μ or x̄).

Median

Middle value when data is ordered.

Mode

Most frequent value.

Variance/Standard Deviation

Measures the spread of data (σ² / σ).

Normal Distribution

Bell-shaped curve; common in real-world data.

Law of Large Numbers

With more trials, results approximate the expected probability.

Central Limit Theorem

Sampling distribution of the mean approaches normal as sample size grows.

Hypothesis Testing

Procedure for testing assumptions about population parameters.

p-value

Probability of observing results at least as extreme as sample results, assuming the null hypothesis is true.