The English version of accounting subjects refers to the standardized terminology used in international financial reporting, with key terms including Assets, Liabilities, Equity, Revenue, and Expenses. Understanding these terms is essential for global business communication and financial analysis. Below is a detailed breakdown of common accounting categories in English.
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Assets
Assets represent resources owned by a company, such as Cash, Accounts Receivable, Inventory, and Property. They are classified as Current Assets (short-term) or Non-Current Assets (long-term). -
Liabilities
Liabilities are obligations a company owes, like Accounts Payable, Loans, and Taxes. Similar to assets, they are divided into Current Liabilities (due within a year) and Non-Current Liabilities (long-term debts). -
Equity
Equity, also called Shareholders’ Equity or Owner’s Equity, reflects the residual interest in assets after deducting liabilities. Key components include Common Stock, Retained Earnings, and Additional Paid-In Capital. -
Revenue
Revenue, or Income, is earned from business operations, such as Sales Revenue, Service Revenue, and Interest Income. It increases equity and is recorded when earned, not necessarily when cash is received. -
Expenses
Expenses are costs incurred to generate revenue, including Salaries, Rent, Utilities, and Depreciation. They reduce equity and are recognized when resources are consumed. -
Profit & Loss Terms
- Gross Profit: Revenue minus Cost of Goods Sold (COGS).
- Net Profit: Final profit after all expenses and taxes.
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Other Key Terms
- Accounts Payable (AP): Money owed to suppliers.
- Accounts Receivable (AR): Money owed by customers.
- Depreciation: Allocation of asset cost over its useful life.
Mastering these English accounting terms ensures clarity in financial statements and facilitates cross-border business operations. For accurate reporting, always verify definitions in the relevant accounting framework (e.g., IFRS or GAAP).