General Ledger
A company's set of numbered accounts that record financial transactions. It includes assets, liabilities, equity, revenues, and expenses.
Amortization
The gradual reduction of a debt or intangible asset over a specified period.
Cost of Goods Sold (COGS)
The expenses directly related to creating a product or service.
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.
Accounts Receivable
Money customers or other debtors owe to a business.
Revenue
The total amount of money earned from business activities before deducting expenses.
Expense
The costs incurred by a business in generating revenue.
Capital
Financial assets or resources that a company uses to fund operations or growth.
Equity
The value of a business, calculated by subtracting liabilities from assets.
Journal Entry
A record of a financial transaction in the accounting system.
Liabilities
A company's debts to third parties.
Financial Statements
Reports summarizing financial activities, including the balance sheet, income statement, and cash flow statement.
Gross Profit
Revenue minus the cost of goods sold (COGS), before deducting operating expenses.
Accrual Accounting
An accounting method that records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.
Bookkeeping
The recording of financial transactions in an organized manner.
Trial Balance
A report that lists all ledger account balances to check if total debits equal total credits.
Assets
Resources owned by a company that have economic value, such as cash, inventory, and property.
Depreciation
The systematic allocation of an asset's cost over its useful life. It's recorded as an expense on the income statement.
Credit
An accounting entry that increases liabilities or equity and decreases assets.
Budgeting
Creating and maintaining a financial plan to manage cash flow.
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.
Book Value
The original value of an asset minus its depreciation or liability.
Working Capital
Current assets minus current liabilities, indicating a company's short-term financial health.
Net Income
The profit remaining after all expenses, taxes, and costs have been deducted from revenue.
Accounts Payable
Money a company owes to another party.
Debit
An accounting entry that increases assets and expenses and decreases liabilities and equity.
Income Statement
A financial report showing revenue, expenses, and net profit over a period.