Accounting and Finance Basics

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Accountant

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An individual who has had specialized training in accounting procedures.

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Accounting

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The process of keeping financial records.

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Accounting cycle

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A process or series of steps that businesses complete to maintain their financial records effectively.

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Accounting standards

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Rules that accountants must follow when preparing financial statements.

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Accrual

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A method of accounting that records transactions at the time they occur.

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Acquisition of funds

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Finance activity involving making decisions about financing.

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Administration of assets

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Finance activity involving making decisions about a firm’s investments.

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Assets

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Anything of value that a business owns.

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Balance sheet

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A financial statement that captures the financial condition of the business at that particular moment.

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Capital investment decisions

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Decisions that determine which projects a business will invest in, how the investment(s) will be financed, and whether to pay dividends to shareholders.