Key accounting terms

Here are some of the most commonly used terms in accounting , along with definitions:

• Assets:  all companies have assets. They are resources that have a monetary value and can be divided into short-term and long-term categories. Short-term assets can include cash or prepaid expenses, and long-term assets consist of land, buildings, company supplies, and furniture. Assets are mostly tangible, but there are items like licenses, copyrights, and customer lists that are intangible assets.
• General Ledger –  Provides a detailed record of all financial transactions during the life of any corporation. The ledger is essential for the creation of financial statements.
• Income:  defined as the lump sum of money that a company receives in a quarter, year or another period. It is the gross income figure from which expenses are subtracted to determine the net income of a company.
• Capital: refers to the financial resources or assets that are owned by a particular company. Capital is different from money in many ways. For example, money is used for transactions that have an immediate purpose, while equity includes assets such as stocks or investments that have a long-term benefit to the company. Key accounting terms