Accounting
A system of recording financial transactions in the form of financial statements.
Companies use it to:
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Bill clients
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Keep track of asstes and liabilities
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Determine profitability
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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.
**BONUS: **
Prepaid expense: future expenses that have been paid in advance.
Accounts receivable: is the balance of money due to a firm for goods or services delivered or used but not yet paid.
Accounts payable: is an account that represents a company’s obligation to pay off a short-term debt to its creditors or suppliers.
Notes payable: represents the amounts that remain to be paid.
Accrued expenses: is an accounting term that refers to an expense that is recognized on the books before it has been paid.
Deferred revenue: 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.
Common stock: are shares of ownership in a corporation that afford their holders voting rights.
Retained earnings: is the amount of net income left over for the business after it has paid out dividends to its shareholders
Shares: are units of equity ownership interest in a corporation that exist as a financial asset providing for an equal distribution.
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