What is Inventory? Definition: Inventory, often called merchandise, refers to goods and materials that a business holds for sale to customers in the near future. In other words, these goods and materials serve no other purpose in the business except to be sold to customers for a profit. They are not used in the produce … Read more
What is Accounts Receivable? Definition: Accounts receivable, often abbreviated A/R, is the amount of money that customers currently owe to the company for goods or services that were purchased on credit. Many companies offer credit programs to customers who frequent the business or suppliers who regularly order products. The purpose of credit program is to … Read more
What are Cash and Cash Equivalents? Definition: Cash and cash equivalents are highly liquid assets including coin, currency, and short-term investments that typically mature in 30-90 days. CCE is actually two different groups of very similar assets that are commonly combined because they are so closely related. Let’s take a look at each one of these … Read more
What are Current Assets? Definition: A current asset, also called a current account, is either cash or a resource that are expected to be converted into cash within one year. These resources are often referred to as liquid assets because they are so easily converted into cash in a short period of time. Take inventory … Read more
What are Assets in Accounting? Definition: An asset is a resource that has some economic value to a company and can be used in a current or future period to generate revenues. These resources take many forms from cash to buildings and are recorded on the balance sheet until they are used. Once these resources are … Read more
The field of accounting is often thought of as a set of complex business rules and endless numbers. Well in short, it is. I say that only jokingly, though. Accounting, at its heart, is actually a set of very simple concepts and principles. Once you understand the basics of accounting, you will be able to grasp … Read more
What are Intangible Assets? Definition: Intangible assets are long-term resources that typically lack a physical presence and have an unknown amount of future value or amount of benefits. In other words, intangible assets are typically intellectual assets the benefit the company over several accounting periods. What Does Intangible Asset Mean? The main examples of intangibles … Read more
Definition: A fiscal year is the 12-month period chosen by management to be the business’ annual accounting period. In other words, this is the period of time that a business completes a full accounting cycle from journal entries to year-end financial statements. What Does Fiscal Year Mean? What is the definition of fiscal year? A fiscal year does not have to follow … Read more