**Basic Accounting Terms (in Easy Language):**
1. **Asset:** This is like stuff a company owns that's valuable, such as cash, stuff they can sell, or buildings and equipment.
2. **Liability:** This is like debts or things a company owes to others, like bills they need to pay or loans they have to repay.
3. **Equity:** Think of equity as the part of the company that belongs to the owner or shareholders after paying off all debts. It's like the value of the business that's left.
4. **Revenue:** Revenue is the money a company makes by selling things or providing services. It's like the cash they earn from their main job.
5. **Expense:** Expenses are the costs a company incurs to run its business, like paying employees, rent, or buying supplies.
6. **Income Statement:** This is like a report card for a company's money. It shows how much money they made (revenue), how much they spent (expenses), and if they made a profit or had a loss.
7. **Balance Sheet:** Think of this as a snapshot of a company's money at a specific moment. It lists what they own (assets), what they owe (liabilities), and what's left for the owner (equity).
8. **Cash Flow Statement:** This statement tracks how money comes in and goes out of a company. It helps see if they have enough cash to pay their bills.
9. **Accounts Receivable:** It's like a list of people who owe the company money for things they bought on credit.
10. **Accounts Payable:** This is like a list of bills a company needs to pay for things they bought on credit.
11. **Depreciation:** Think of this as the way things like machines or buildings lose value over time. It's like saying they're getting older and not worth as much.
12. **Accrual Accounting:** This is a way of counting money when it's earned or spent, not just when cash changes hands.
13. **General Ledger:** Imagine it as a big book where a company writes down all its money moves, like money in and out.
14. **Trial Balance:** It's like a checklist to make sure that all the money stuff adds up correctly. It checks if what they spent equals what they earned.
15. **GAAP:** This stands for "Generally Accepted Accounting Principles," which are like the rules everyone follows for accounting in the U.S.
16. **IFRS:** This stands for "International Financial Reporting Standards." It's like a set of rules used by many countries to keep accounting consistent around the world.
These are the basic money words used in accounting. They help keep track of a company's finances and tell the story of how well it's doing.
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