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Terms & Concepts

To improve your business acumen, you must first learn basic business terms. Accounting should be part of every entrepreneur's core business vocabulary. Accounting is the systematic recording and reporting of financial transactions in a firm. The term "assets" refers to your company's total financial holdings. These are usually divided into two categories: current and fixed. Cash and inventory are examples of current, or short-term, assets. Equipment and land are examples of fixed assets, or long-term assets. Liabilities are the debts owed by your company to another person or organisation. Liabilities, like assets, must be classified as current or long-term. An expense payable to a supplier is an example of current, or short-term, liabilities. The majority of corporate loans are long-term obligations. The amount of money you make from a company activity in a specific period of time is referred to as revenue. By multiplying the per-unit cost of goods or services by the number of units sold, you can calculate earnings.

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