What are the basic terms in finance?

What are the basic terms in finance?

Financial statement – a summary of a business’s financial position for a given period. Financial statements can include a profit and loss, balance sheet and cash flow statement. Fixed asset – a physical asset used in the running of a business. Fixed cost – a cost that is not part of producing a good or service.

What are the basics of accounting and finance?

Financial accountants mainly prepare three kinds of statements the balance sheet representing the assets and liabilities; the income statement reflecting the profit and loss; and the cash flow statement depicting the cash inflows and outflows.

What are the 5 basic accounting?

principles of accounting are; Revenue Recognition Principle, Historical Cost Principle, Matching Principle, Full Disclosure Principle, and Objectivity Principle.

What is accounting cycle?

The accounting cycle is a collective process of identifying, analyzing, and recording the accounting events of a company. It is a standard 8-step process that begins when a transaction occurs and ends with its inclusion in the financial statements.

What is the double entry system?

Double-entry bookkeeping is a method of recording transactions where for every business transaction, an entry is recorded in at least two accounts as a debit or credit. In a double-entry system, the amounts recorded as debits must be equal to the amounts recorded as credits.

What is Golden Rule in accounting?

Debit what comes in, Credit what goes out. Debit the receiver, Credit the giver. Debit all expenses Credit all income.

What are basic financial terms and concepts or accounting terms?

Not getting too much into the technical language, we have explained the important Basic Financial Terms and Concepts or Accounting terms in a simple manner: 1. Assets: Asset is an economic resource, something valuable that you own as an individual or a business entity.

What are the basic accounting terms to remember?

Basic accounting terms, acronyms, abbreviations and concepts to remember. 1 1. Accounts receivable (AR) Accounts receivable (AR) definition: The amount of money owed by customers or clients to a business after goods or 2 2. Accounting (ACCG) 3 3. Accounts payable (AP) 4 4. Assets (fixed and current) (FA, CA) 5 5. Asset classes.

What are the different terms in Business Finance?

Business and Finance Terms to Know. 1 1. Accounts Payable. Accounts payable is a business finance 101 term. This represents your small business’s obligations to pay debts owed to lenders, 2 2. Accounts Receivable. 3 3. Accrual Basis. 4 4. Accruals. 5 5. Asset.

What are the basic accounting terms related to the balance sheet?

The Balance Sheet is one of the two most common financial statements produced by accountants. This section pertains to potentially confusing basic accounting terms that relate to the balance sheet. 1. Accounts Payable (AP) Accounts Payable include all of the expenses that a business has incurred but has not yet paid.