Definition
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Term
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A systematic way of recording and reporting financial transactions for a business or organization.
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A
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Accounting
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The amount of money a company owes creditors (suppliers, etc.) in return for goods and/or services they have delivered. (2 words)
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A
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Accounts payable
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The amount of money owed by customers or clients to a business after goods or services have been delivered and/or used. (2 words)
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A
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Accounts receivable
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An incurred expense that hasn’t been paid yet. (2 words)
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A
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Accrued expense
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A group of securities that behaves similarly in the marketplace. (2 words)
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A
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Asset class
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A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity, at a given time. (2 words)
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B
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Balance sheet
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A financial asset or the value of a financial asset, such as cash or goods.
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C
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Capital
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The revenue or expense expected to be generated through business activities (sales, manufacturing, etc.) over a period of time. (2 words)
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C
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Cash flow
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The direct expenses related to producing the goods sold by a business. (4 words)
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C
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Cost of goods sold
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An accounting entry that may either decrease assets or increase liabilities and equity on the company's balance sheet, depending on the transaction.
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C
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Credit
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Assets that will be converted to cash within one year. (2 words)
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C
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Current assets
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Debts that are payable within a year. (2 words)
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C
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Current liabilities
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An accounting entry where there is either an increase in assets or a decrease in liabilities on a company's balance sheet.
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D
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Debit
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The process of allocating or spreading capital investments into varied assets to avoid over-exposure to risk.
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D
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Diversification
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Long-term assets likely to provide benefits to a company for more than one year, such as a real estate, land or major machinery. (2 words)
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F
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Fixed assets
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Payments (e.g., rent) that will be made on a regular schedule. (2 words)
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F
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Fixed expense
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A complete record of the financial transactions over the life of a company. (2 words)
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G
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General ledger
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A set of rules and guidelines developed by the accounting industry for companies to follow when reporting financial data. (4 words)
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G
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Generally accepted accounting principles
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A state whereby an individual or organization can no longer meet financial obligations with lender(s) when their debts come due.
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I
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Insolvency
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Debts that are typically payable over a period of time greater than one year, e.g. a mortgage. (3 words)
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L
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Long-term liabilities
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A company's total earnings, calculated by subtracting total expenses from total revenues. (2 words)
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N
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Net income
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Business expenditures not directly associated with the production of goods or services, e.g., advertising costs, property taxes or insurance premiums. (2 words)
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O
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Operation expenses
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A financial statement that is used to summarize a company’s performance and financial position by reviewing revenues, costs and expenses during a specific period of time, such as quarterly or annually. (4 words)
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P
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Profit and loss statement
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A business document in which all ledgers are compiled into debit and credit columns in order to ensure a company’s bookkeeping system is mathematically correct. (2 words)
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T
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Trial balance
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Expenditures that may change from one time period to another, e.g., labor costs. (2 words)
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V
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Variable expenses
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