Glossary
A simple dictionary of finance and accounting terms designed for students and beginners entering the world of numbers.
Balance Sheet
A financial report that shows what a company owns and what it owes at a specific point in time.
Cash Flow
The total amount of money being transferred into and out of a business.
Debit
An accounting entry that either increases an asset or expense account, or decreases a liability or equity account.
Equity
The value of the shares issued by a company, or the owner's remaining value after all debts are paid.
Expense
The cost of operations that a company incurs to generate revenue, such as rent or salaries.
Ledger
A record book or digital file where all of a company’s financial transactions are organized and summarized.
Liability
Something a person or company owes, usually a sum of money like a loan or an unpaid bill.
Long-term Assets
Valuable items a business plans to keep and use for more than one year, such as machinery or land.
Net Income
The total profit remaining after a business has paid all of its expenses and taxes for a specific period.
Retained Earnings
The sum of a company's profits that are kept and invested back into the business instead of being shared with owners.
Short-term Assets
Resources that a company expects to convert into cash or use up within one year, such as cash, inventory, and accounts receivable.
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