Glossary

To Help You Understand Our Lingo a Short, Sweet, and Simplified Glossary.

SUMA figure, calculation or total; usually of money
MOXIEThe ability to face challenges with courage, knowledge, determination, skill, fortitude, and spunk
ACCOUNTA record that tracks the financial sum of an asset, liability, expense, or revenue item based on the increase or decrease of a transaction
ACCOUNTINGThe process of classifying, recording, and maintaining financial books for a business or individual and summarizing activities into financial statements
ACCOUNT PAYABLEA debt or outstanding balance owed for products or services due to a creditor (vendor) – the opposite of account receivable
ACCOUNT RECEIVABLEUncollected amount due from products or services sold on credit to a debtor (client) – the opposite of accounts payable
ACCOUNTANTA person who audits financial transactions and prepares taxes for an individual or company
ASSETAn item or property owned by a business or individual which has value – the opposite of a liability
BALANCE SHEETA financial report that calculates assets, liabilities, and equity of a company and shows how they balance and equal
BANK RECONCILIATIONCalculating the difference between the balance of a bank statement and the currant book balance
BOOKKEEPINGThe act of keeping records of financial transactions
BUDGETA projected financial plan for the sum of income and expense for a given time period in the future

BUDGETINGPlanning phase when determining the sum of money desired for given income and expenses based on projections compared to actual monies spent and receive by a business or individuals
CASH FLOWSThe net sum used to indicate the internal funds available during a specific accounting period
CHART OF ACCOUNTSA compiled list of all bank, liability, asset, equity, cost of goods sold, and expense accounts for a business
COST OF GOODS SOLDThe price of purchased raw materials to create a finished product for sale – not to be confused with an expense
CLIENT/CUSTOMERAn individual or company that purchases a product or service – the opposite of a vendor
CREDITORA person or entity to whom a debt of money is owed by another – the opposite of a debtor
DEBTORA person or entity who owes a debt of money to another – the opposite of a creditor
EQUITYThe right, claim or interest of the owner in a property or business
EXPENSEPurchase or charge associated with operating a business – not to be confused with cost of goods sold
GROSS PROFITTotal of revenue less cost of goods sold
INCOME STATEMENTA report that indicates if a company has a net loss or a net profit. This is determined by the amount of revenue minus expenses for a specific period of time
INTERNAL AUDITAn examination of the records and procedures of a business to determine if currant procedures and policies are being followed does not need to be conducted by an accountant
LIABILITYA debt of money or obligation owed by a business or individual – the opposite of an asset
NET INCOMEThe amount of excess money from revenues and gains over expenses for a given period of time – the opposite of net loss
NET LOSSThe amount of excess money from expenses over revenues and gains for a given period of time – the opposite of net income
REVENUEA source of income received in exchange for goods and services sold to a client/customer
TRANSACTIONAn agreement or exchange of services or money recorded by an entry in the company’s books
VENDORAn individual or company that provides a service or sells something – the opposite of client/customer

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