Accounting Topics
A glossary of common accounting terms used in VioBalance.
Accrual Basis: Income is reported when you invoice, and expenses when you receive a bill, regardless of when money moves. This gives a better long-term view.
Cash Basis: Income/Expenses are reported only when money actually changes hands. Simpler, but less accurate for inventory businesses.
Cash Basis: Income/Expenses are reported only when money actually changes hands. Simpler, but less accurate for inventory businesses.
The direct costs attributable to the production of the goods sold in a company. This includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good.
Equity represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off.
Formula: Equity = Assets - Liabilities.
The method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets (like vehicles or machinery) for both tax and accounting purposes.