Finance Flashcards
Balance sheet
A report of the final balance of all assets , liabilities , and owners capital at the end of an accounting period .
Break-even point
The point at which the money from product sales equals the costs of making and distributing the product .
Budget
A formal , written statement of expected revenue and expenses for a future period .
Capital
The buildings , equipment , tools , & other goods needed to produce a product or the money used to buy these items .
Credit
An arrangement to receive cash , goods or services now and pay for them in the future .
Debit
A bookkeeping entry on the left side of your account . It records the increase to an asset or an expense OR the decrease of a liability or item of equity or revenue .
Equity
Amount of owners’ or shareholders’ portion of a business .
Fixed expense
A consistent and regular cost of doing business such as rent or insurance .
Asset
Anything of value that a business owns , such as cash , equipment or buildings .
Income statement
A financial report of the revenue , expenses , and net profit/ loss for an accounting period . Also known as the P&L statement for “profit and loss”.
Invoice
An itemized statement of money owed for goods shipped or services rendered (receipt).
Liability
A debt owed by a business
Markup
An amount ADDED to the cost of an item to cover expenses and ensure a profit .
Net profit
The amount remaining after expenses deducted from sales revenue .
Return on investment (ROI)
The amount earned as a result of an investment .
