Understanding the accounting language is important as a business owner. The accounting profession has many definitions and processes to reference depending on the industry of business. Below are a few vocabulary words to get you started thinking about your accounting system and establishing policies and procedures.
Cost basis: Original cost of investment minus prior accumulated depreciation
Goodwill: Purchase price less tangible value of physical assets purchased
Net asset value: Cost basis minus accumulated depreciations (prior total depreciation)
NSF: Non-sufficient funds, typically a returned check
Unrealized gain & loss: Investment that has increased & decreased in value, but not yet sold
A successful business owner understands their cost, asset worth and financial statements. Fontenot & Associates Solutions supports all business with establishing policies and procedures, visit our website today to learn more.
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