Glossary of Terms

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1031 ExchangeA 1031 exchange is an exchange of “like-kind” property. This means the property you sell and the property you purchase have to be “similar.” You also have a limited time...
1040Form 1040: The Ultimate Guide to the Individual Federal Tax Return What is form 1040? Form 1040 is the individual federal income tax return form used by the IRS to...
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Account NumbersThe Chart of Accounts is divided up into 5 major Chart of Accounts and Account Types. If you are going to use account numbers in your chart of accounts, then...
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Accrual Basis Accounting“It’s Accrual World”Accrual basis accounting is based on the “Matching Principal” which means the goal is to match revenues and expenses in the same period.In short, this means you record...
Accumulated Depreciation and Depreciation ExpenseDepreciation ExpenseWhen you purchase something “major” like a piece of machinery or equipment you do so because of the long term benefit you will derive from that “Fixed Asset.”Since the...
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ASC 606 - RevenueThere are 5 major account types in a company’s Chart of Accounts: • Assets • Liabilities • Equity • Revenue • Expenses The first 3 make up the Balance... from Contracts with Customers

Cash Basis AccountingCash Basis Accounting means income and expenses are only recorded when paid.In the strictest sense, this means no accounts receivable and no accounts payable exist.In theory, this means you would...
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Chart of Accounts and Account TypesThere are 5 major account types in a company’s Chart of Accounts: • Assets • Liabilities • Equity • Revenue • Expenses The first 3 make up the Balance...
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FASB ASC 606 - RevenueThere are 5 major account types in a company’s Chart of Accounts: • Assets • Liabilities • Equity • Revenue • Expenses The first 3 make up the Balance... from Contracts with Customers
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Intuit IncThe FounderIntuit, Inc. ($INTU) was founded by Scott Cook in 1983 in Palo Alto, CA.Intuit is currently headquartered in Mountainview, CA.Scott Cook famously sat across from his kitchen table watching...
InventoryAny business that buys and sells products has inventory. eCommerce businesses by definition have inventory. If you look at a simple retail business, they buy products from a wholesaler or...
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Purchase OrderA purchase order is just that and nothing more. It’s an order to purchase something. No money has changed hands, and no expense has been incurred. Accordingly, a purchase order...

Section 179This is a special election a business can make to take advantage of the full expenditure as a deduction in the first year. Most companies will elect to do this...

Consider outsourcing your accounting to a professional to ensure accuracy and compliance.

Accounting Terms