💰 1. Money In & Out
➡️ What is revenue?
The money a company earns from selling products or services.
“Our bakery made $8,000 in revenue last month from selling cakes and coffee.”
➡️ What is a due balance?
Money that must be paid by a specific date.
“Your due balance for this month’s electricity bill is $45.”
➡️ What is capital?
The money the company uses to run the business.
“The owner invested $10,000 of capital to start the business.”
➡️ What is a quote? / What is an estimate?
A statement showing how much a product or service will cost.
“The mechanic gave me a quote of $250 to repair the car.”
➡️ Who is an auditor?
A person who checks if financial statements are correct.
“An auditor reviews company accounts to make sure everything is correct and legal.”
➡️ What is profit?
The money a company makes after all expenses are paid.
“After paying rent, salaries, and supplies, the bakery’s profit was $2,000.”
➡️ What is an outstanding balance?
Money that has not been paid yet — it’s late.
“The customer hasn’t paid in two months — their outstanding balance is $120.”
➡️ What are short-term liabilities?
Money the company owes that must be paid within one year.
“The company must pay its short-term liabilities (like phone bills) within 30 days.”
➡️ What is an invoice?
A document showing what a customer must pay for items already sold.
“We sent the customer an invoice for the chairs they bought.”
➡️ Who is an accountant?
A person responsible for preparing and analyzing accounts.
“The accountant prepares financial statements every month.”
➡️ What is net profit?
Profit after taxes and all deductions.
“After taxes, the company’s net profit was only $1,200.”
➡️ What are liabilities?
Total money a company owes to others.
“The company’s liabilities include a bank loan and unpaid supplier bills.”
➡️ What is a reserve?
Money saved for emergencies or future needs.
“The company keeps a reserve fund for emergencies, like equipment breaking down.”
➡️ What is an account statement?
A document showing a list of transactions for a period of time
“The bank sends a monthly statement showing all your transactions.”
➡️ What is reconciliation?
The process of checking that numbers match bank information.
“We compare our bank statement with our book records to reconcile any differences.”
➡️ What is payroll?
Money the company must pay to employees.
“With 10 employees, the company’s payroll is $15,000 every month.”
➡️ What are receivables? / What is accounts receivable?
Money a company expects to receive in the future from customers.
“We sent three invoices last week, so we have $2,500 in receivables.”
➡️ What is equity?
The financial health of a company based on how much it owns vs. how much it owes.
“If a company owns $100,000 in assets and owes $60,000, the equity is $40,000.”
➡️ What is a receipt?
A document proving a payment was made.
“Always ask for a receipt so you can prove you paid.”
➡️ What is closing the books?
When a company reviews its financial records at the end of a period.
“At the end of December, the company closes the books for the year.”
➡️ What are payables? / What is accounts payable?
Money a company still needs to pay to suppliers.
“We bought materials on credit, so we now have $3,000 in accounts payable to our suppliers.”
➡️ What is an installment payment?
When a customer pays part of a bill now and the rest later.
“He bought a laptop and pays $50 per month in installments.”
➡️ What is net worth?
The difference between total assets and total liabilities.
“After calculating everything the business owns and owes, the net worth is $75,000.”
➡️ What is a ledger?
A company record showing all financial transactions in order.
“All company transactions are written in the ledger — it’s the master record.”
➡️ What is a cost analysis?
When a company examines costs to decide if a project is worth doing.
“Before launching a new product, the team performs a cost analysis to see if it’s profitable.”