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Advice from
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Accounting Terms: Do you get an A+ in financing?
Along with every other subject a professional detailer
needs to know, from chemistry to math to public
relations, there is a need for financial smarts as well.
Even if you have a professional accountant, the U.S.
Chamber of Commerce advises small business
owners to know these Top 17 financial terms.
Do you know them? See how many you can
get right by matching the definition to the term.
Accounts receivable
Accounts payable
Accruals
Assets
Balance sheet
Break-even point
Burn rate
Cash flow
Credit
Depreciation
Dividends
Expenses
Fiscal year
Forecasting
Liabilities
Revenue
Profit and loss
statement
1. _____________ are the costs
a business owes for acquiring
something and the can be broken
down into: Fixed, Variable,
Accrued, Operational
2. _____________are resources or
property with economic value
owned by the business. They are
both tangible and intangible and
can include investments, cash,
inventory and real estate.
3. Your business’s _____________
is the total sales and cash flow of
goods and services from its primary
productions.
4. A _____________ is a measured
period of time used for accounting
purposes. Each company chooses
its preferred timeline of what works
best for them, and it doesn’t have
to start in January.
5. _____________ are a type of
accounting where you record your
income as soon as it’s earned and
expenses as soon as they’re billed.
Therefore, your real time accounts
aren’t always matching your
recorded profit. They also give you
a long-term view of your business’s
future income and expenses.
6. _____________ refer to the
amount owed to stockholders or
shareholders from a company’s
profits. They are a distribution of a
company’s earnings, requiring the
business to have a hold on its realtime
losses and gains.
7. _____________ is the combined bills
your business owes, not including
your payroll costs. Because they
aren’t immediately paid, they’re
considered liabilities and are usually
expenses on company credit cards
or bills. _____________ allows you
to consider your current liabilities
versus assets when buying
something new for your company.
8. _____________ is the amount of
money that’s coming into going
out of your business—both your
gains and losses. Your business’s
_____________ is present in
operating activities, investment
activities and financing activities.
9. A _____________ is when you’re
bringing in just enough money to
cover what you owe in your business.
This means your business isn’t
earning or losing any profit.
10. _____________ happens when an
asset loses its value over time. In
accounting, _____________ is used
as a method to allocate the cost of
the asset’s life expectancy.
11. _____________ is also known as
an income statement or an earnings
statement. It helps you identify your
profits and losses to evaluate your
company’s current financial standing,
usually quarterly.
12. Businesses use _____________ to
predict future business trends by
looking at past financial data. It can
be used to predict things such as
sales, gross profit or how long it will
take to pay off debts.
13. _____________ is the amount of
time your business will be able to
continue operating with the cash
you have without turning a profit. It
tells you how long you can be selfsustaining
without a steady income.
14. A _____________ is used as a quick
insight into your business’s current
financial position. It includes what
the company owes and owns, as
well as any capital. It allows you to
compare sections of your business
to understand how much your
business is worth at any given time.
15. _____________ is the money
that flows out of your business’s
accounts. Using _____________
either increases liability or revenue
accounts, or decreases an asset or
an expense account.
16. _____________ is incoming money
owed to your business for services
or products received. This is
considered an asset because
it’s money that your business is
bringing in. You typically track
accounts receivable with invoices.
17. _____________ are legal or financial
debts your business owes, such as
mortgages, credit card debt, taxes
and accounts payable.
ANSWERS:
1. Expenses
2. Assets
3. Revenue
4. Fiscal year
5. Accruals
6. Dividends
7. Accounts payable
8. Cash flow
9. Break-even point
10. Depreciation
11. Profit and loss
statement
12. Forecasting
13. Burn rate
14. Balance sheet
15. Credit
16. Accounts
receivable
17. Liabilities
20 | AUTO DETAILING NEWS | VOL. 8, NO. 3 • FALL 2023