Accounting 101

Cash Flow - CF

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Certified Public Accountant - CPA

A member of an officially accredited professional body of accountants.

Balance Sheet - BS

A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.

Accounts Payable - AP

An accounting entry that represents an company's obligation to pay off a short-term debt to its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities.

Accounts Receivable - AR

Money owed to a company by its debtors.

Net Income - NI

Net income (NI) is a company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses.

Accounting equation

*Assets = Liabilities + Owner's Equity* The basic accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a business. It is the foundation for the double-entry bookkeeping system.

Capital - CAP

The amount of cash and other assets owned by a business. Capital can also represent the accumulated wealth of a business, represented by its assets less liabilities. Capital can also mean stock or ownership in a company.

Owner's Equity - OE

The owner's investment in the business minus the owner's draws or withdrawals from the business plus the net income (or minus the net loss) since the business began. Mathematically, the amount of owner's equity is the amount of assets minus the amount of liabilities.

Financial statements

A financial statement (or financial report) is a formal record of the financial activities and position of a business, person, or other entity.

Accounting - ACCG

The measurement, processing and communication of financial information about economic entities.

Assets (Fixed and Current) - FA and CA

Things that are resources owned by a company and which have future economic value that can be measured and can be expressed in dollars.