A system of recording financial transactions in the form of financial statements.
Companies use it to:
Keep track of asstes and liabilities
Track the flow cash
3 Remarkable concepts:
Assets: something valuable belonging to a person or organization such as cash, properties, investment or inventory.
Liabilities: the responsibility of a person, business, or organization to pay or give up something of value.
Equities: the value of a company.
future expenses that have been paid in advance.
is the balance of money due to a firm for goods or services delivered or used but not yet paid.
is an account that represents a company’s obligation to pay off a short-term debt to its creditors or suppliers.
represents the amounts that remain to be paid.
is an accounting term that refers to an expense that is recognized on the books before it has been paid.
is a liability on a company’s balance sheet that represents a prepayment by its customers for goods or services that have yet to be delivered.
are shares of ownership in a corporation that afford their holders voting rights.
is the amount of net income left over for the business after it has paid out dividends to its shareholders
are units of equity ownership interest in a corporation that exist as a financial asset providing for an equal distribution.