Assets = valuable resources owned by a company that have economic value
Example: The company's assets include cash, equipment, and real estate property.
Liabilities = financial debts or obligations owed to outside parties
Example: Bank loans and unpaid invoices are listed under current liabilities.
Equity = the remaining value of an asset after deducting total liabilities
Example: The founders retained 60% of the company's equity following the investment round.
Accounts Receivable = money owed to a business by customers for products or services delivered
Example: The accounting team followed up on overdue accounts receivable to improve cash flow.
Accounts Payable = money owed by a business to vendors or suppliers for goods received
Example: We must settle our accounts payable before the end of the month to avoid penalty fees.
Depreciation = the gradual reduction in the financial value of an asset over time
Example: Machinery and office equipment are subject to annual depreciation.
Balance Sheet = a financial statement showing assets, liabilities, and equity at a specific point in time
Example: Please review the balance sheet before the quarterly review meeting.
Income Statement / Profit & Loss (P&L) = a report showing a company’s revenues and expenses over a period
Example: Our net profit increased significantly compared to last year's income statement.
Cash Flow Statement = a record of how much cash enters and leaves a business
Example: Even though we show a profit, our cash flow statement indicates we are low on liquid funds.
Revenue = the total amount of income generated by the sale of goods or services
Example: The tech sector experienced a major boost in advertising revenue this quarter.
Overhead / Overhead Costs = ongoing business expenses not directly tied to creating a product or service
Example: We need to cut down our administrative overhead to improve profit margins.
Compliance = the act of obeying rules, regulations, or laws
Example: Failure to maintain compliance with local tax laws can result in severe penalties.
Deduction = an expense that can be subtracted from taxable income to reduce overall tax owed
Example: Make sure to log all business travel expenses so we can claim them as deductions.
Fiscal Year = a 12-month period chosen by a company for tax and accounting purposes
Example: Our fiscal year ends on March 31st.
Cash Flow = the net movement of money coming in and going out of a business
Example: Maintaining positive cash flow is essential for meeting daily operational expenses.
Gross Profit = revenue minus the direct cost of goods sold before deducting general expenses
Example: Higher material costs led to a slight reduction in our gross profit margin.
Net Income = total earnings left over after subtracting all operating expenses, interest, and taxes
Example: The annual financial report showed a significant increase in net income.
Audit = an official examination of an organization's financial records and statements
Example: External auditors are visiting our office next week to examine the tax records.
General Ledger = the primary record used to track all financial transactions of a company
Example: The junior accountant is reconciling the general ledger today.
Reconcile = to compare financial records to make sure they match
Example: Can you reconcile the bank account before closing for the day?
Allocate = to officially distribute resources or costs to specific budgets or departments
Example: We need to allocate more funds to the marketing department.
Forecast = to predict future financial trends based on historical data
Example: Management asked us to forecast next year's sales growth.
Write Off = to cancel a bad debt or record an asset as a loss
Example: The client went bankrupt, so we had to write off their unpaid invoice.
Assets = valuable resources owned by a company that have economic value
Example: The company's assets include cash, equipment, and real estate property.
Liabilities = financial debts or obligations owed to outside parties
Example: Bank loans and unpaid invoices are listed under current liabilities.
Equity = the remaining value of an asset after deducting total liabilities
Example: The founders retained 60% of the company's equity following the investment round.
Accounts Receivable = money owed to a business by customers for products or services delivered
Example: The accounting team followed up on overdue accounts receivable to improve cash flow.
Accounts Payable = money owed by a business to vendors or suppliers for goods received
Example: We must settle our accounts payable before the end of the month to avoid penalty fees.
Depreciation = the gradual reduction in the financial value of an asset over time
Example: Machinery and office equipment are subject to annual depreciation.
Balance Sheet = a financial statement showing assets, liabilities, and equity at a specific point in time
Example: Please review the balance sheet before the quarterly review meeting.
Income Statement / Profit & Loss (P&L) = a report showing a company’s revenues and expenses over a period
Example: Our net profit increased significantly compared to last year's income statement.
Cash Flow Statement = a record of how much cash enters and leaves a business
Example: Even though we show a profit, our cash flow statement indicates we are low on liquid funds.
Revenue = the total amount of income generated by the sale of goods or services
Example: The tech sector experienced a major boost in advertising revenue this quarter.
Overhead / Overhead Costs = ongoing business expenses not directly tied to creating a product or service
Example: We need to cut down our administrative overhead to improve profit margins.
Compliance = the act of obeying rules, regulations, or laws
Example: Failure to maintain compliance with local tax laws can result in severe penalties.
Deduction = an expense that can be subtracted from taxable income to reduce overall tax owed
Example: Make sure to log all business travel expenses so we can claim them as deductions.
Fiscal Year = a 12-month period chosen by a company for tax and accounting purposes
Example: Our fiscal year ends on March 31st.
Cash Flow = the net movement of money coming in and going out of a business
Example: Maintaining positive cash flow is essential for meeting daily operational expenses.
Gross Profit = revenue minus the direct cost of goods sold before deducting general expenses
Example: Higher material costs led to a slight reduction in our gross profit margin.
Net Income = total earnings left over after subtracting all operating expenses, interest, and taxes
Example: The annual financial report showed a significant increase in net income.
Audit = an official examination of an organization's financial records and statements
Example: External auditors are visiting our office next week to examine the tax records.
General Ledger = the primary record used to track all financial transactions of a company
Example: The junior accountant is reconciling the general ledger today.
Reconcile = to compare financial records to make sure they match
Example: Can you reconcile the bank account before closing for the day?
Allocate = to officially distribute resources or costs to specific budgets or departments
Example: We need to allocate more funds to the marketing department.
Forecast = to predict future financial trends based on historical data
Example: Management asked us to forecast next year's sales growth.
Write Off = to cancel a bad debt or record an asset as a loss
Example: The client went bankrupt, so we had to write off their unpaid invoice.
1. Unpaid invoices from clients are recorded as ______ on the financial record.
2. The quarterly ______ showed that revenue was high, but operating costs reduced total profitability.
3. After deducting all operating costs and taxes from our revenue, we determined our final ______.
4. The company bought heavy machinery, which is considered a fixed ______ on the balance statement.
5. Outstanding loans and debts to suppliers represent the company's major ______.
6. The accounting firm was brought in to conduct an independent financial ______.
7. We calculate the ______ of our equipment each year to account for wear and tear.
8. All daily sales transactions are logged directly into the company's ______.
9. The business had trouble paying its short-term bills due to poor ______.
10. We must pay our vendors promptly to keep our ______ up to date.
11. Deducting the cost of goods sold from sales revenue leaves us with the company's ______.
12. Shareholder ______ increased significantly after the profitable second quarter.
13. Please review the latest ______ to check our total revenue and operating expenses over the past quarter.
14. We track our incoming cash and outgoing payments every month using our ______.
15. The tech sector experienced a major boost in advertising ______ this quarter.
16. We need to cut down our administrative ______ like rent and utilities to improve profit margins.
17. Failure to maintain strict ______ with local tax laws can result in severe financial penalties.
18. Make sure to log all business travel expenses so we can claim them as tax ______.
19. Our company's ______ ends on March 31st for tax and reporting purposes.
20. Can you ______ the bank statement with our general ledger before closing for the day?
21. We need to ______ more funds to the marketing department for next month's campaign.
22. Management asked our team to ______ next year's sales growth based on current market trends.
23. Because the client went bankrupt, we had to ______ their unpaid invoice.