English for Accounting 1

📚 Important Words to Know
accounts receivable — money owed to a company by customers for goods or services already delivered
accounts payable — money a company owes to suppliers for goods or services already received
balance sheet — a financial statement showing a company's assets, liabilities, and equity at a specific point in time
accrual accounting — a method that records revenue and expenses when they are earned or incurred, regardless of when cash changes hands
depreciation — the gradual reduction in the recorded value of an asset over its useful life
gross profit — revenue minus the direct costs of producing goods or services, before operating expenses
net income — a company's total profit after all expenses, taxes, and costs have been deducted from revenue
overhead — ongoing business expenses not directly tied to producing a product or service, such as rent and utilities
fiscal year — a 12-month accounting period used for financial reporting, which may or may not align with the calendar year
audit — a formal examination of a company's financial records to verify their accuracy and compliance