A
Cash Basis Accounting:
Where you record revenue and expenses only when actual money changes in your hands.
Calendar year:
A standard 12 month reporting period that starts January 1 and ends on December 31st.
Equity:
The net value of a business that truly belongs to its owners.
Drawlings:
Withdrawals of cash or other assets taken by the owner.
Sole proprietorship:
A business owned by one individual. The accounting owner's capital and drawlings.
Accrual Basis Accounting:
When you record money coming in, when the work happens.
Fiscal Year:
A custom 12 month accounting period that an organization, business, or government uses for budgeting.
Partnership:
When one or two individuals own a business.
Common Stock:
The account that represents the ownerships shares issued by a shareholder.
Accounts Receivable:
The money that your customers owe your business for products or services.
Reporting Period:
A specific defined span of time such as a month quarter or year.
Corporation:
A business that is legal and it seperates the entity from it's owners.
Capital Account:
An equity account that tracks an owner's or partner's withdrawals.
Accounts Payable:
Short term money that your business owns to suppliers or vendors for good.
Accounting Equation:
Assets = Liabilities + Equity.
Shareholders Equity:
The ownership interest in a corporation of a common stock.
Retained Earnings:
The cumulative net income of a corporation that has a business rather than distributed to shareholders.
Adjusting Entries:
Is a special bookkeeping update made at the end of an accounting period.
Net Income:
It is the actual profit or money left left over after all costs, expenses, and taxes.
Dividends:
Distributions of earnings to shareholders of a corporation and retained earnings.
Additional Paid in capital:
The amount received by a coporation from the par value of the stock issued.