Category: Bookkeeping Terminology
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The Chart of Accounts
There’s a lot of bookkeeping terminology out there. Debits, credits, depreciation, fixed assets, etc. It can be daunting to work through your own numbers, or to converse with a bookkeeping professional if you’re unsure of terms. For those who are a bit lost, I’ve started the category “Bookkeeping Terminology” for you to follow. Today, we’re…
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What is Depreciation?
Some business expenditures are for high-cost items that will be useful to the business for many years to come. Those items are categorized as “fixed assets” and their expense is recognized gradually over the span of their lifetime. The process of recognizing an item’s expense over its useful life is called “depreciation” (or “amortization” for…
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What are Fixed Assets?
Businesses purchase many goods that are necessary to continue running or to improve the company in some way. The vast majority of these purchases are small expenses, such as office supplies, internet, utilities, rent, or marketing materials, etc. However, some necessary expenditures have a much higher dollar value and a much longer useful life, items…
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Debits and Credits
If you’ve overheard a bookkeeper or half listened to an accountant, chances are you’ve run across the terms “debit” and “credit.” What are they, and what do they mean for your books? A full discussion of history and etymology is outside the scope of this blog so I shall be brief. Debits and credits track…
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