Accounting Know-How

Transaction

A business activity such as a scale or purchase

Accounting Cycle

A process or series of steps that businesses complete to maintain their financial records effectively

Income Statement

A summary that shows how much money a business has made or lost

Cash Flow a Statement

A summary with estimates as to when, where, and how much money will come into and go out of a business

Ledger

Accounting record for a specific department or area of the business Statement

Bookkeeping

Actually recording the business's financial transactions

Assets

Anything of value the business owns

Credit

Arrangement by businesses to buy now and pay later

Source Documents

Checks, receipts, invoices, and other items representing a business's financial transactions

Cash

Currency and coins

Liabilities

Debts that the business owes

Creditors

Individuals to whom a business owes money

Stockholders

Individuals who own shares of stock in a business

Profit

Monetary reward a business owner receives for taking the risk of investing in business

Income

Money received by a business from outside sources

Expenses

Monies that a business spends

Accounting

Process of keeping financial records

Balance Sheet

Report of a business's financial condition at a particular moment

Accounting Standards

Rules that accountants must follow when preparing financial staements

Investors

Those who invest their funds in a business