Accounting Fundies Terms

Assets

What you own

Increases w/ Debit

Decreases w/ Credit

Liabilities

What you owe

Increases w/ Credit

Decreases w/ Debit

Equity

Owner’s stake

Increases w/ Credit

Decreases w/ Debit

Revenue

Money earned

Increases w/ Credit

Decreases w/ Debit

Expenses

Cost incurred

Increases w/ Debit

Decreases w/ Credit

Cash

Asset

Money in Bank

Accounts receivable

Asset

Money customers owe you for work already done

Supplies- inventory

Asset

Supplies on hand, not yet used

Prepaid insurance

Asset

paid for in advance, still has value until it “expires”

Prepaid rent

Asset

rent paid in advance, has value until it “expires”

Equipment

Asset

physical things the company owns

Accumulated depreciation

Opposite of an asset

tracks how much value equipment has lost over time

credit normal balance even though it sits with assets

Accounts payable

Liability

Bills you owe but have’t paid

Salaries payable

Liability

Wages employees earned but you haven’t paid yet

Unearned revenue

cah a customer already paid you for work you haven’t done yet