Key Accounting Terms

Some common accounting terms with their definitions:

1. Assets: Economic resources owned by the company and used in its operations to generate revenue.
2. Liabilities: Financial obligations incurred by the company that must be paid to others.
3. Equity: The owners' rights in the company's assets after deducting all liabilities.
4. Revenue: Money the company receives from selling goods or providing services.
5. Expenses: Costs incurred by the company in the process of generating revenue.
6. Balance Sheet: A financial report that shows assets, liabilities, and equity at a specific point in time.
7. Income Statement: A financial report that shows revenues, expenses, and net profit or loss for a specific period.
8. Cash Flows: The movement of cash in and out of the company during a specific period.
9. Fixed Assets: Assets owned by the company for a long period and used in operations such as buildings and equipment.
10. Current Assets: Assets that can be converted into cash within one year, such as cash, inventory, and accounts receivable.
11. Current Liabilities: Financial obligations that must be paid within one year, such as outstanding debts and creditors.
12. Long-term Liabilities: Financial obligations that must be paid after more than one year, such as long-term loans.
13. Net Profit: The difference between revenues and expenses after deducting taxes.
14. Accruals: Revenues or expenses that have been recorded but not yet received or paid.