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| Financial plan | Is a set of documents that outline the essential financial facts about the new venture. |
| Capital | Is the money supplied by investors, banks, or owners of a business. |
| Asset | Cash, equipment, buildings, supplies, inventory, and land are examples. Property or other items of value owned by a business. |
| Expense | Amount of money used to buy or do something. |
| Liabilities | Are creditor’s claims to the assets of a business. They are the debts of a company. |
| Budget | A plan specifying how money will be used or spent during a particular period. |
| Accounting | Is the systematic process of recording and reporting the financial position of person or an organization. |
| GAAP | The set of rules that all accountants use. |
| Accounting Equation | Assets = Liabilities + Owner’s Equity |
| Owner’s Equity | Is an owner’s claim to the assets of the business. |
| Financial Statements | Are documents that summarize the changes resulting from business transactions that occur during an accounting period. The documents are: income statement, balance sheet, and statement of cash flows. |
| Income statement | Is a report of the revenue, expenses and the net income or net loss over an accounting period. Profit and loss statement. |
| Balance Sheet | Is a report of the balances in all assets, liabilities, and owner’s equity accounts at the end of an accounting period. |
| Cash flows | Are the money that is available to a business at any given time. |
| Statement of cash flows | Is a financial report that shows incoming and outgoing money during an accounting period. |
