It is worth taking the trouble to learn basic accountancy terms when you are setting up in business. If you employ certified accountants in Goole or whatever region you live in, having that knowledge will enable you to ask the right questions when you meet with them. These are some commonplace accounting terms, along with what they mean:
Accrued expense is the phrase used by accountants to describe a cost that you have incurred in the running of your company, but that you have not yet paid off.
Items of financial value that are owned by your company – for example, equipment or machinery – are referred to in accounts as “assets”. The monetary value of your assets can change over time, and the book value means the original valuation of any business asset when it was acquired.
This is the accounting term that is used to describe any business debts that you have that are still owed. Typical examples of such debts include loans and accounts payable.
This means the total value of the business once all outstanding liabilities are factored in. A simple way of understanding it is to think of equity as what is left once the cost of your liabilities has been subtracted from the value of your assets.
At Adaptive Accountancy, we have almost a decade of experience with helping sole traders, subcontractors and small firms with their accounts. We can provide more detailed information about this if you give us a call today.