bryce math

Accounting: The process of recording, maintaining, and reporting an organization’s financial transactions and records.

Accounting Cycle: The process of recording and processing a company’s financial transactions over an accounting period, e.g. a month, quarter, or year.

Accounting Equation: Assets = Liabilities + Shareholders’ Equity.

Accrual Accounting Method: The revenues and expenses are recognized and recorded at the time they occur, even if money doesn’t change hands.

Asset: A tangible or intangible resource that has economic value, owned by a person or organization.

Balance Sheet: A balance sheet is a financial statement that marks a company's financial situation at a moment in time, showing all assets, liabilities and owners’ equity.

Cash Accounting Method: Revenues and expenses are recognized and recorded when cash actually changes hands.

Cost Accounting: A facet of managerial accounting with the intent of determining all the costs, including variable and fixed costs, associated with producing a product or service.

Debits and Credits: Equal but opposite bookkeeping account entries; debits are on the left side, and they either increase an asset or expense account, or decrease equity, liability, or revenue accounts, while credits are on the right side, and they either increase equity, liability, or revenue accounts or decrease an asset or expense account.

Double-entry Accounting System: Every financial transaction has an equal and opposite effect, recorded in at least two accounts, where one account gets a debit and the other a credit.

Finance: Focuses on the management of the assets, liabilities, equity, and cash flow of an organization, financial analysis like ROI and ROE, and financial planning of future growth.

Financial Accounting: Creating and reporting financial data and statements (using standardized accounting rules) for external users, including investors, creditors, and governmental agencies.

GAAP: Generally Accepted Accounting Principles.

Income: All money received from doing business, including sales revenue and other income.

General Ledger: Also called the “GL”, it is an organization’s main accounting record that stores transactions and financial data, organized by accounts.

Liability: A debt or obligation owed by a person or organization.

Managerial Accounting: Involves analyzing and communicating financial information to internal users, e.g. managers, so that they can make informed decisions.

Net Income: Gross Profit minus all Expenses, also called Net Profit, and often referred to as a company's "bottom line".

Owner’s Equity: A company’s assets minus its liabilities.

Profit and Loss (P&L) Statement (Income Statement): A statement that reports revenues, expenses and income (or loss) for a time period in the past.

Statement of Cash Flows: A financial statement that shows changes in income and balance sheet accounts, to ultimately show changes in cash entering and leaving the company.

T-Account: A visual representation of a general ledger account, using two columns to display debits and credits.