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Entrepreneur vocabulary (D to F)

Terms that can help you understand your business\\\' balance sheet
By Entrepreneur Staff |

Being an entrepreneur is more than having a great idea and working hard. Its also about constantly educating yourself on the technicalities of how to make the company run efficiently. As a business owner, you may hire an accountant to do your bookkeeping but it is still up to you to make the effort to comprehend how it all works.


Below are basic terms that can help you understand your business\\\' income statement and balance sheet:


Depreciation Expense: The portion of an asset’s cost charged as an expense during the accounting period to adjust for a reduction in value due to factors such as wear and tear


Expenses: Period costs other than the cost of goods sold


Equity Capital:  The book value of the business comprised of the owner’s initial investment plus retained earnings; also, the difference between total assets and total liabilities


Financial Statement: Generally refers to one of the primary accounting reports: Balance Sheet, Income Statement and Cash Flow Statement



Fiscal Year: A tax year of 12 months beginning on a date selected by the business owner


Fixed Assets:  Tangible resources with long life used in operation of the business: land, buildings, machinery, equipment and vehicles


Fixed Expense: Costs that do not change greatly over the short term and are not directly related to manufacturing or sales volume; such as rent, office expense, utilities and insurance


To read more, check out:

Entrepreneur vocabulary (A to C)

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