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Entrepreneruship
| Term | Definition |
|---|---|
| GAAP | "generally accepted accounting principles" |
| Financial Reports | documents that summarize the results of your business operation and provide a picture of its financial position |
| Accounting period | block of time covered by your accounting report |
| Calendar year | one year period that begins January 1 and ends on December 31 |
| Fiscal year | year long period around which your financial reports are dictated |
| Assets | anything of value that the business owns |
| Current assets | are cash or other items that can be converted to cash fairly quickly and are used by the business within the year |
| Accounts receivable | the amount customers owe your business |
| Fixed assets | items that will be held for more than one year |
| Liabilities | are the debts of the business |
| Accounts payable | most common account classification; this is the amount of money that your business owes to creditors |
| Owner's equity | the total amount of assets minus total liabilities will give you the worth of your business |
| Chart of accounts | list of accounts a business uses in its operation |
| Debits | left side of the account |
| Credits | the right side of the account |
| Cash basis | recording your income when it is received and your expenses when they are paid |
| Accrual basis | you record income when it is earned and expenses when they are incurred |
| Journal | the financial diary of the business |
| Journalizing | the process of recording business transactions in a journal |
| General journal | most common type of journal that is used to record any business transaction |
| Posting | the process of transferring amounts from the general journal to accounts in the general ledger |
| Income statement | a report of the revenue, expenses, and the net income or loss for the accounting period |
| Balance sheet | a report of the final balances of all asset, liability, and owner's equity accounts and the end of an accounting period |
| Cash flow | is the amount of cash that is available at any given time period |
| Statement of cash flow | reports how much cash your business took in and where the cash went |
Created by:
fsilve01
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