Accounting Bookkeeping Terms You Need to Know

01. Basic Accounting & Bookkeeping Terms

Balance Sheet The financial statement that presents a snap of the company's financial position like assets, liabilities and equity. It's called a balance sheet because the things owned by company must equal liabilities and equity.

02. Basic Accounting & Bookkeeping Terms

✓ Assets: All the things a company owns to victoriously run its business, such as cash, buildings, land, tools, equipment, vehicles, and furniture.

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03. Basic Accounting & Bookkeeping Terms

✓ Liabilities All the debts the company owes, such as bonds, loans, and unpaid bills.

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04. Basic Accounting & Bookkeeping Terms

✓ Equity All the money invested in the company by its owners. In a small business owned by one person or a group of people, the owner's equity is shown in a Capital account.

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05. Basic Accounting & Bookkeeping Terms

✓ Income statement The financial statement presents a summary of the company's financial activity over a certain period, such as a month, quarter, or year. .

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06. Basic Accounting & Bookkeeping Terms

✓ Revenue All money collected in selling the company's goods and services or selling assets the business no longer needs or earning interest by offering short-term loans to employees or other companies.

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08. Basic Accounting & Bookkeeping Terms

✓ Costs of Goods Sold All money spent to purchase or make the goods or services a company plans to sell to its customers.

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09. Basic Accounting & Bookkeeping Terms

✓ Expenses All money spent to operate the company that's not straight related to the sale of individual goods or services.

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10. Basic Accounting & Bookkeeping Terms

✓ Accounting period The time for which financial information is being tracked. Most companies track their financial results monthly, so each accounting period equals one month.

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11. Basic Accounting & Bookkeeping Terms

✓ Accounts Receivable The account used to track all customer sales that are made by store credit.

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12. Basic Accounting & Bookkeeping Terms

✓ Accounts Payable The account used to track all outstanding bills from vendors, contractors, consultants, and any other companies or individuals from whom the company buys goods or services.

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12. Basic Accounting & Bookkeeping Terms

✓ Accounts Payable The account used to track all outstanding bills from vendors, contractors, consultants, and any other companies or individuals from whom the company buys goods or services.

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13. Basic Accounting & Bookkeeping Terms

✓ Interest The money a company needs to pay if it borrows money from a bank or other company.

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14. Basic Accounting & Bookkeeping Terms

✓ Journals Where bookkeepers keep records of daily company transactions. Each of the most active accounts, including cash, Accounts Payable, Accounts Receivable, has its own journal.

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