Balance Sheet
A record of a business's assets, liabilities, and equity at a specific time. It's used to assess a business's financial health.
Cash Flow
The amount of cash a business generates or spends within a period. Positive cash flow means a business is generating more money than it's spending.
Depreciation
The systematic allocation of an asset's cost over its useful life. It's recorded as an expense on the income statement.
Equity
The value of a business, calculated by subtracting liabilities from assets.
General Ledger
A company's set of numbered accounts that record financial transactions. It includes assets, liabilities, equity, revenues, and expenses.
Liabilities
A company's debts to third parties.
Accounts Payable
Money a company owes to another party.
Accounts Receivable
Money customers or other debtors owe to a business.
Cost of Goods Sold (COGS)
The expenses directly related to creating a product or service.
Book Value
The original value of an asset minus its depreciation or liability.
Budgeting
Creating and maintaining a financial plan to manage cash flow.
Accrual Accounting
An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.
Amortization
The gradual reduction of a debt or intangible asset over a specified period.
Assets
Resources owned by a company that have economic value, such as cash, inventory, and property.
Bookkeeping
The recording of financial transactions in an organized manner.
Capital
Financial assets or resources that a company uses to fund operations or growth.
