Terminologies Used In A Company Account - SS2 Accounting Lesson Note

Liabilities: These are obligations that a company owes to others, such as loans, accounts payable, or taxes.

Equity: This represents the value of the company that is owned by shareholders. It is calculated as assets minus liabilities.

Revenue: This is the income generated by a company from its sales of goods or services.

Expenses: These are the costs incurred by a company in order to generate revenue, such as salaries, rent, or utilities.

Profit: This is the amount of revenue left over after all expenses have been paid.

Depreciation: This is the gradual decrease in value of an asset over time, due to wear and tear or obsolescence.

Amortization: This is the gradual decrease in the value of an intangible asset, such as a patent or trademark, over time.

Balance sheet: This is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.

Income statement: This is a financial statement that shows a company's revenue and expenses over a specific period of time.

Cash flow statement: This is a financial statement that shows the flow of cash into and out of a company over a specific period of time.

Audit: This is an independent examination of a company's financial records and processes to ensure that they are accurate and comply with relevant laws and regulations.