Accounting Terminology and Concepts

Accounting Terminology

Accounting Terminology

Assets: a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit

Equity: the net amount of funds invested in a business by its owners, plus any retained earnings

Expenses: the cost of operations that a company incurs to generate revenue

Liabilities: a legally binding obligation payable to another entity

Revenue: the value of all sales of goods and services recognized by a company in a period

Companies

A legal entity formed by a group of individuals to engage in and operate a business enterprise in a commercial or industrial capacity

Sciences related to Accounting

Management, economics, mathematics, computer science, statistics, law, political science, and engineering

Accounting Equation

Assets = Liabilities + Equity

Balance Accounts

A statement that shows the total money available at the start of the accounting period

Accounting Plan

Is the list of the accounts of a company that are used in the accounting

Objectives

Maintaining a systematic record of all financial transactions and preparing financial reports to assess the financial position of the business organization

Generalities

Is made up of a catalog of accounts and the description and dynamics for their application

Fundamental Aspects

Environments, objectives, characteristics

Levels of Codification

Class, group, account, and subaccount

IFRS

International Financial Reporting Standards