Accounting Concept Map

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Everything on a balance sheet is classified as an asset, liability, or owners equity.

General Accounting Terms

Invest

In finance, investing is money spent with the expectation of achieving a profit or material result in the futurre.

Net Worth

In finance, net worth is described as the total wealth of an individual, company, or household.

Expenses

Subtopic

In finance, an expense is a cost of operations that a company incurs to generate its revenue.

Debt

In finance, debt is an amount owed for funds borrowed.

In finance, a loan is when money is given to another party in exchange for repayment of the loan plus interest. (Does not have to have interest)

Capital

In finance, capital is typically cash or liquid assets being held or obtained for expendatures.

Accounting

Source Document

A source document is an original copy of a document that contains the details of a business transaction.

Certified Public Accountant

Trusted financial advisor that helps individuals, businesses, and orgs.

A Certified Public Accountant is the title of a qualified accountant in numerous countries.

Ms. Vather's Husband :)

Professional Accountant

Wears boring clothing :)

A person who has expertise in the fieldof accountancy.

Accounting Roles

Accountant Clerk

Accountant clerks are limited to bookkeeping and other basic admiinistrative tasks.

A high level of education is not required for an accountant clerk to have.

A high school diploma will suffice.

Similarities

Both roles have to have strong communication skills because they may deal with customers with little to no background in the accounting process.

Both roles have to be very strong with numeracy skills because they use them daily.

Both of these roles participate in the accounting cycle.

Accountant

Unlike an accountant clerk, there is a wide range of sub fields an accountant can be.

Auditing

An accountant may choose to specialize in any of these fields or more.

Taxation

Management Accounting

In order to become a Certified Public Accountant, the highest level of accounting in the USA, you must have your bachelor's of accounting, 30 hours of extra studying, pass 4 exams in 18 months, and amass two years of accounting work experiance.

Businesses

Types of Businesses

Non-Profit Organization

Manufacturing Business

Merchandising Business

Service Business

An example of a service business that is also a corporation would be TD Bank.

Levels of Business

Any type of business can also be any level of business.

Corporation

A corporation is a legal business that is seperate from its owners.

Partnership

A type of enterprise owned by a pair of people.

Sole Proprietorship

Usually these business are smaller and more local businesses.

A type of enterprise owned by a single individual.

Balance Sheets

A balance sheet is a summary of the financial balances of an individual or organization. On a balance sheet you can see things like assets, liabilities, and owners equity.

Owners Equity

Liabilities

Accounts Payable

Money owed to a person or comapny.

Mortgage

Very similar.

Similar to a loan but usually used for larger purchases like land or buildings.

Loan

The lending of money to your business from a bank.

Classified Balance Sheet

Two very similar concepts

A classified balance sheet is similar to a balance sheet, but it keeps out certain topics like current assets and liabilities, long term assets and liabilities, and others.

Assets

On a balance sheet, the assets are put in order of liquidity with most liquifiable on the top.

Supplies

Any supplies that the business owns.

Equipment

Any equipment that the business owns.

Cash

Accounts Receivable

Accounts receivable refers to any money that is owed to a person or company.