In business, administration refers to the management of a company’s day-to-day operations. It includes tasks such as planning, organizing, staffing, directing, and controlling. The goal of administration is to ensure that the company runs smoothly and efficiently, and that it achieves its goals. Administration is a broad field that encompasses many different areas of expertise….
Category: Definitions
Most common business terminologies
Trial balance
A trial balance is a bookkeeping worksheet that lists the balances of all ledgers (accounts) that have nonzero balances. A trial balance is an important step in the accounting process, because it helps identify any mathematical errors throughout the first three steps in the cycle: journalizing transactions, posting them to the ledger, and preparing an unadjusted trial balance. It also provides the basis…
Ledger
A ledger is a book or digital record that stores bookkeeping entries. The ledger shows the account’s opening balance, all debits and credits to the account for the period, and the ending balance. Ledgers may contain detailed transaction information for one account, one type of transaction, or—in the case of a general ledger—summarized information for all of a company’s financial…
Income statement
An income statement is a financial report that shows a company’s profit and loss over a period of time, usually a quarter or a year. It shows how a company’s revenue (sales or income) is transformed into net income (profit or loss) by subtracting all expenses from both operating and non-operating activities. It also complements the balance sheet and the cash flow statement by showing how income…
Cash flow statement
A cash flow statement is a financial report that details how cash flows i.e. entered and left a business during a reporting period. It shows how a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. It also complements the income statement and the balance sheet by…
Balance sheet
A balance sheet is a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time1. It provides a snapshot of a company’s finances (what it owns and owes) as of the date of publication. It also shows how the assets are financed, either through either debt or equity. The balance sheet adheres to the following accounting equation, with…
Accounting
Accounting is the process of recording, classifying and summarizing financial transactions. It provides a clear picture of the financial health of your organization and its performance, which can serve as a catalyst for resource management and strategic growth. Accounting also involves the communication of financial and non-financial information to various stakeholders such as investors, creditors, regulators, and tax authorities. Accountants Accountants are the backbone of…