A

Account
A document on business transactions (deals). When you buy something on credit, the company you deal with draws a bill. This means, it has recorded what you're buying and how much you pay for that. You have to perform similar operation towards any customer you open a credit for. This notion can also refer to the category of expenses and assets, where a record of operation is made, for example, an account "transport expenses" can cover all accounts of expenses incurred during a business trip.

Accountant
A person having experience and skills in keeping business records. Usually, the word "accountant" is applied in respect to highly qualified professionals and not to those keeping accounting books.

Accounts Payable
Payments to suppliers and various creditors. A document stating the fact, that you owe something. The total sum of debts to suppliers.

Accounts Receivable
A document stating that somebody owes something to you. All accounts, credit data - documents stating what each customer owes to you. All that together is called accounts receivable.

Accumulated Depreciation
Accumulated value of depreciation, which has been presented as a depreciation of fixed capital from the moment it has been bought by the company.

Allowance for Doubtful Accounts
Evaluation value of accounts receivable, which won't be received.

Analysis
Organizing an idea or a problem into parts and performing a thorough examination of each part. In business, you have to analyse, which means to perform analysis of a problem before making the best decision. Let's imagine, that there's a problem with the selling of certain goods. You perform an analysis of all the factors causing bad sales.

Articles of Incorporation
A legitimate document corresponding to the legislation of the respective state, which determines the aims and internal rules of the corporation. These documents have to be attested by the respective state institutions before the existence of the corporation is legally registered, and the corporation gets a permission to perform business activities.

Assets
All your property, which has a certain price. Your personal assets (excluding your talents) - money you have in your pocket or at the bank, everything you own, including all securities, property, any part of house, furniture, home equipment, as well as other belongings. A company's assets - similar: funds at the bank, receivables, securities, registered on your company, real estate or buildings, equipment, ready products for sale or half-stock, raw materials and everything that has a price and belongs to your company.

B

Bad debts
The money somebody owes you, if you can't get it back, or if you can't be sure you'll be able to get everything you lent back from those you gave the loan to.

Balance
The amount of money left on an account. Total amount of money left with a bank after all transactions have been performed (deposits and cash withdrawal), is called a balance.

Balance Sheet
An important business document, which shows, what a company owns and what it owes on the date the balance sheet is made. In the balance sheet the assets and their value are enumerated on one side and the liabilities and the owner's capital (investments made into the business) - on the other side. Liabilities include everything a company owes.

Bookkeeping
The process of recording all financial transactions into accounting documentation. It is very important to keep precise, accurate and complete financial records. A good bookkeeping system will provide considerable help to you.

Book value
The value of a company's assets or liabilities recorded in the account book.

Break-Even Point
A point, at which income is equal to expenses, i.e. such stage of business development, when income (money received from sales) is equal to expenses (payments).

Budget
A plan expressed in money terms. How much money is necessary to ensure that the company can function? How much money, you think, will your company receive?

C

Cash
Money in cash or at one's disposal. Currency - hard money, promissory notes and securities (for instance, cheques), which are in your drawer, are called cash. There also belongs the money you can get upon your first request - the money placed on your bank account. Cash is what you need to support your business, however, quite frequently even the most successful companies experience a lack of cash, especially when developing the business.

Cash Discount
A discount you make for quick payments on bills. Notwithstanding the fact, that the discount is quite small: it makes about 2%, in annual payments it can form a significant sum. The 2% discount for payments on bills within 10 days equals approximately 36% annually.

Cash Flow
Flow of cash received and paid.

Cash Receipts
Money received on your company's account from customers. Cash receipt can be compared to food and water for living beings. A company exists while there're capital resources.

Capital
Available money, which can be invested, or total assets, which can be put into production. In other words, your capital consists of total property and financial resources that can be used for business conducting and vitally important needs in a functioning business.

Capital Expenditure
Expenditure on items exceeding the established minimum value (determined by the company, for example, USD 500), the respective assets are used for more than one year. These items form the fixed capital (fixed assets).

Capital Requirement
A list (a schedule) of expenses, which are required in order to start a business. The owner has to start maintaining such records before the business is started.

Contract
An agreement on mutual obligations between two or more parties. In accordance with business rights, a contract exists only when there's a coincidence of opinions irrespective of whether it's represented in a written form or not. However, usually contracts are concluded in writing, and they are to be taken very seriously, because a contract is legally binding for the parties who sign it.

Controllable Expenses
These are the expenses a businessman can control or limit. Some of them can be postponed or made within a longer period of time. For instance, depreciation of equipment is a controllable kind of expense in the sense that these expenses are not obligatory, if new equipment can be bought later, when the level of development of the business allows to buy new equipment with a discount on depreciation.

Corporation
A company consisting of a group of persons, perceived by the law as a legal entity which acts on the basis of Articles of Incorporation and can conduct business as a separate entity, similar to how private individuals act as businessmen and partners.

Co-Signers
Persons who sign a loan agreement together and bear joint responsibility in case of default. When you ask somebody to become a co-signer, you ask him to share the debt in case you're not able to pay it. Co-signers guarantee the repayment of a debt, and the lender can perform legitimate steps aimed at getting rights for the property of co-signers, if they refuse to pay the debts.

Cost of Goods Sold
Direct expenses on production of goods for sale.

Credit
The terms "credit" and "debit" are used in accounting for recording the performed transactions. To credit means to record an item in the right-hand part of your balance sheet. A credit in the assets item reduces them. A credit in the liabilities item increases them. Another definition: a good reputation of a company's owner from the point of view of timeliness of payments on liabilities forms his high credit rating.

Current Assets
Assets, which represent cash resources or which can be easily converted to cash (by selling) within one year.

Current Liabilities
Liabilities, which must be paid within one year.

Current Ratio
The ratio between the current financial resources and current liabilities. The ratio 1:1 or higher means, that financial resources which can be received within one year from the assets, cover all liabilities for the year.