accounting basics 1
money that you earn by working, or producing goods
income
part ownership in a business you pay money for a piece of the business
stock
a person or company whose job is preparing the financial records of people, companies, or organizations
an accountant
What is the equation to figure out a company's profits?
Revenue - Expenses
What are the three sections/activities to a Cash Flow Statement?
Operating, Investing and Financing
money that you get from selling goods or services for more than they cost to produce or provide
profit
money spent in carrying out a job, a business
expenses
Cash - where would it appear on the balance sheet?
Assets
the process of keeping track of financial accounts, including cash flows and expenses and revenue
accounting
a document that shows a company's profit or loss in a particular period
Profit&loss account (P&L) or Income Statement
amounts of money that a person or organization owes, debts
liabilities
amounts owed by customers to a company at a particular time and not yet paid
receivables
What is depreciation?
decrease in value of an asset
where would retained earnings appear on a balance sheet?
under owner's equity
a statement that shows the value of a company's assets and its debts
balance sheet
Ownership in a business
equity
money that a company gets from the sale of their product or service
revenue
what are COGS? Where would they appear on an Income Statement?
Cost of Goods Sold - on Expenses
under owner's equity
a document that shows the money coming into and going out of a company during a particular period
cash-flow statement
decrease in net profit
net loss
something that is owned
asset
total assets needs to equal total liabilities and total equity
what is the purpose of the cash flow statement?
what is the most important equation in accounting and on which statement does this appear?
Assets = Liabilities + Owner's Equity