24 ACCOUNTING BASICS THAT EVERYBODY NEEDS TO KNOW
1. ASSETS
Resources owned by a business that have economic value.
2. LIABILITIES
Obligations or debts owed by a business.
3. EQUITY
The owner’s interest in the business.
4. REVENUE
Income earned from normal business operations.
5. EXPENSES
Costs incurred in the process of earning revenue.
6. PROFIT
Financial gain after deducting expenses from revenue.
7. LOSS
Occurs when expenses exceed revenue.
8. CASH FLOW
The movement of money in and out of a business.
9. GROSS MARGIN
Revenue minus the cost of goods sold.
10. NET INCOME
Total revenue minus total expenses.
11. BALANCE SHEET
Financial statement showing assets, liabilities, and equity.
12. INCOME STATEMENT
Financial statement showing revenue, expenses, and profit over time.
13. CASHFLOW STATEMENTS
Financial statement showing cash inflows and outflows.
14. DEBITS AND CREDITS
Entries used to record transactions in double-entry accounting.
15. JOURNAL ENTRIES
Records of all transactions.
16. GENERAL LEDGER
Comprehensive record of all financial transactions.
17. TRIAL BALANCE
Report ensuring debits and credits are balanced.
18. ACCRUAL ACCOUNTING
Recording revenues and expenses when they are earned or incurred.
19. CASH ACCOUNTING
Recording revenues and expenses when cash is exchanged.
20. COST OF GOODS SOLD
Direct costs attributable to the production of goods sold.
21. INVENTORY
Goods available for sale or used in production.
22. COMPLIANCE
Adherence to financial regulations and standards.
23. BUDGETING
Planning future business finances.
24. FORECASTING
Predicting future financial performance.
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