Accounting In Calgary – Accounting Terms That Business Owners Need To Learn

Entrepreneurs usually use an accountant to manage finances. For this reason, financial management will be more professional and can remain focused on other aspects of your business. But even an accountant setting requires more money to be spent on billing. If you have just started your business, at we spell out some accounting terms that used on daily basis. Financial management itself is one of the solutions to minimize costs.

Below are accounting terms that you need to learn as a business owner in Calgary:

Net Income:
This term is also known as profit. Net income can be gotten after subtracting the earning with the expenses you have spent. The left over is called net income.

They are the charges that are incurred on the business when providing or selling services. Materials, transportation, salaries are under expenses.

This can be defined as a debt that the company must pay within a specified period of time. To a business, liabilities include taxes due, bonds payable and account payable.

Any valuable item owned by the company is called asset. Machines for production process, furniture, vehicles which last for several years are business assets. Company logos and cash are also part of the company assets.

The process of recording your business transaction into the finance boom is referred to as bookkeeping. What are recorded are income, sales, purchases and payments.

Active Revenue:
This is a payment received for a service your company has performed. When a customer pays for a service, the money paid is called active revenue.

Passive Revenue:
It is revenue received without the business owner direct involvement in the business activity.

Balance Sheets:
This sheet shows business financial position in a period of time. Its usually summarizes assets, ownership equity and liabilities.

Income Sheet:
This shows companys profit or losses in a period of time. It shows the revenue received and the operating expenses during the time.

Accounts Receivable:
This when the customers have not paid the goods or services rendered, they owe the money to you. It is noted as current assets on the balance sheet.

Accounts Payable:
This is the bills that you havent paid to your vendors or suppliers. The total of your accounts payable is considered as current liability on the balance sheet

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We are here to make sure that your business is successful, so you can concentrate on your business and leave the bookkeeping and accounting to me!