Basic accounting principles questions and answers.

Accounting systematic recording, reporting and analysis of financial transactions according to accepted principles in order to provide meaningful financial information Revenue amount of money a business receives over a period of time Operating Revenue income from sales or services based on the goal of the business Non-operating Revenue income which does not come from the primary goal of business Sales Figures represent the amount of revenue generated by the business Cost of Goods Sold cost directly associated with making or acquiring products Gross Profit subtracting the cost of goods sold from net sales figures Income required contribution for the support of a national, state or local government calculated based on income tax Operating Expenses daily expenses incurred in the operation of a business Fixed Expenses expenses which are necessary, stable and occur regularly Flexible or Variable Expenses expenses which are still necessary but do not have a fixed amount Discretionary Expenses expenses which are not necessary to daily operation of the business Total Expenses tabulation of all expenses incurred in running a business, exclusive of taxes or interest expense on interest income Net Income Before Taxes amount of income earned by a business prior to paying income taxes Net Income amount of money the business has earned after paying income taxes Fixed Assets property which a firm owns long-term, will not be converted to cash for at least a year Inventory Goods on Hand assessing the amount of goods which are in the possession of the business Illiquid Assets assets which are not able to be sold quickly which carry higher risk of losing money Liquid Assets assets which can be easily converted into cash which have very low risk because prices are stable Generally Accepted Accounting Principles accounting rules used to prepare, present and report financial statements Financial Accounting Standards Board sets accounting principles Assets are items of value owned by the company Current Assets are any assets easily converted into cash within one calendar year Cash is money available immediately Net Worth also called total equity, found by subtracting liabilities from assets Accounts Receivable money owed to the business for purchases made by customers, suppliers and other vendors Notes Receivable notes due within the year Total Fixed Assets total dollar value of all fixed assets in your business, less any accumulated depreciation Liabilities debts the company owes or obligations the company has Accounts Payable comprised of all short-term obligations owed by your business to creditors,