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Small business accounting: 10 terms you need to know

These are the 10 essential accounting terms every small business owner should know to confidently manage finances and track expenses.
The article from CNBC outlines essential accounting terms that small business owners should understand to manage their finances effectively. Key terms include assets, which are resources owned by the business; liabilities, representing debts and obligations; equity, which is the owner's stake in the business; revenue, the income from sales or services; and expenses, the costs incurred to generate revenue. The article also explains the importance of understanding the difference between accounts payable, money owed to suppliers, and accounts receivable, money owed to the business by customers. Other crucial concepts covered are gross profit, the difference between revenue and the cost of goods sold; net profit, which is gross profit minus operating expenses and taxes; and cash flow, the movement of cash in and out of the business. Understanding these terms helps small business owners make informed financial decisions, track their business's financial health, and plan for future growth.

Read the Full CNBC Article at:
[ https://www.cnbc.com/select/accounting-terms-small-business-owners-need-to-know/ ]