Terms starting with
Capital Lease
A long-term lease that essentially functions as a purchase. The lessee assumes ownership-like risks and benefits, and the asset is recorded on the balance sheet,…
READ MORECash Equivalent
Short-term, highly liquid investments that can be quickly converted into a known amount of cash typically within three months. Examples include treasury bills and money…
READ MOREContingent Liability
Contingent liability is a potential obligation that may arise depending on the outcome of a future event, like a lawsuit or product warranty claim. It’s…
READ MOREClosing Entries
Journal entries made at the end of an accounting period to reset temporary accounts like revenue and expenses to zero. These balances are transferred to…
READ MORECash Accounting
An accounting method that records income when cash is received and expenses when cash is paid. It’s simpler than accrual accounting and works well for…
READ MORECurrent Liabilities
Obligations a business must settle within one year. This includes accounts payable, short-term loans, accrued expenses, and taxes payable. Managing current liabilities is crucial for…
READ MORECurrent Assets
Assets expected to be used, sold, or converted into cash within one year. Common examples include cash, accounts receivable, inventory, and short-term investments. They’re essential…
READ MOREChart of Accounts
A contra account offsets the balance of a related account. For example, accumulated depreciation is a contra asset account that reduces the value of fixed…
READ MOREContra Account
A contra account offsets the balance of a related account. For example, accumulated depreciation is a contra asset account that reduces the value of fixed…
READ MORECredit
In accounting, a credit is an entry that increases liabilities, equity, or revenue accounts and decreases asset or expense accounts. It’s also used in sales…
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