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What In the Accountant Does That Mean?
Have you ever been sitting with your accountant, and they use a term like “trial balance,” … and you tilt your head a little bit?
Well, we have the blog for you. Not everyone understands all accounting principles, and it can feel overwhelming to begin to learn.
We’re listing all the accounting terminology basics so you can feel confident, certain and capable when discussing matters with your accountant and be prepared for the road ahead. Let’s begin!
- Accounts Payable: The department that tracks money owed by the business.
- Accounts Receivable: The department that tracks money other businesses or individuals owe the business.
- Accruals: The period when a transaction occurs — this means when the transaction happens, not when the cash flow related to it occurs.
- Assets: An item or resource that has value that the business owns/controls.
- Capital: All the assets and cash in a business.
- Closing the Books: Competition of the bookkeeping for a certain accounting period.
- Dividends: Profits made by the company distributed to their shareholders/investors.
- Liquidity: How easily an investment or asset can be converted to cash.
- Overhead: Costs to maintain the business’ operation that do not directly impact the company’s products or services (rent, marketing, etc.).
- Trial Balance: A document, report or worksheet that contains the balances of all ledgers. From here, accountants balance the numbers to ensure everything adds up properly and is equal.
Of course, if there is any term you are unsure about, you can always ask your accountant for help — that’s what we’re here for!
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