Here you will find an outline of some of the key terms and concepts involved in bookkeeping.

Anything of value owned by a business that is used in more than one business transaction i.e. forklift, trucks and other vehicles, network servers, etc.

Anything a company owes to an individual or businesses (Debt).

An accounting term for Income or gross receipts.

Equity (a.k.a Capital, retained earnings, Owners interest)
Total assets minus total liabilities of an individual or company. For a company, also called net worth or shareholders’ equity or net assets. This is generally the worth of the company if all the assets were sold and all the debts settled/paid.

Balance Sheet:
Statement of financial condition of a business as of a specific date (or point in time). The three components that make up a company’s balance sheet are the assets, liabilities and equity.

Profit and Loss (a.k.a Income Statement)
A business’s revenue (income) and expenses for a specific period of time. The difference between the total revenue and the total expense is your business net income. Where as the total revenue is also called gross revenue.

Trial Balance
A listing of the accounts/categories in the accounting system and their balances as of a specified date; a trial balance will always have two columns one debit and one credit the total of both these columns should be equal to each other.

Chart of Accounts
A list of account names (categories) into which all your accounting transactions will be recorded similar to the trial balance except not all the balances are shown.