Unless you are an accountant, you may not know what people are talking about when they mention certain terms. Human nature dictates that we’re either embarrassed or ashamed to ask what certain words mean. In the event you have been hearing terms that you are unfamiliar with, let’s go over a few commonly used terms.

Let’s start with the basics and define the word account. An account is a record that collects and stores general information. Companies have different accounts, such as cash accounts, account receivables accounts and sales account types. So, in this case, an account is the record of all money coming in and out.

A company may have several different types of accounts, like cash accounts, receivables and sales. These are some of the most common types of accounts that businesses have that keep the money straight.

Assets are things which are valuable to you; they can be sold and liquidated. This can also be cash, accounts or anything else that can be sold to get value and money for the owner.

When you have debt, it is referring to the amount of money that you owe to another person, or a lending institution. Many times, when your debt is greater than your worth, you are said to be in an upside down situation.

When a company or person has debt, it is something that they owe to others. This amount is subtracted from your worth and assets. This amount is the price plus any interest payments you may owe a financial institution or lender. Debt is usually looked at most closely when you are applying for credit.

Typically, a gain and a loss relate to your end of year ledgers. When you get something monetarily over and above what you paid for your investment or article that you sold, you call it a gain. Gains must be taxed or levied by the government and Internal Revenue Service.

When you lose money on the sale or trade of any asset, you call it a loss. At the end of the year when it comes tax time, your losses will be weighed against your gains. You will only pay taxes on the amount that is equal to your gains less your loses.

You’ll hear people talk about r and d and r and d costs. This simply refers to research and development, which is a huge part of any and all corporate infrastructure. It weighs heavily when dealing with businesses and accounting.

Standard cost is a fixed cost that something is anticipated to cost in the future. If you are trying to figure what your costs for a particular thing or action will be, you will use a standard cost to figure things out.

These are just a few of the terms that you may hear when people are discussing business and accounting practices. You’ll hear these terms on the news, read them in the papers and hear business men everywhere dropping them like they were names of superstars. There are many other terms that will be used and if you’re interested, there are many places online to look for their definitions. Simply go to your favorite search engine and run a search on the word.

As an accountant, all of your job duties will revolve around the same thing, finances. Scottsdale Accountant The term depreciation is used to refer to a belonging or investment that has lost value. You’ll always be your clients’ financial best friend.