To choose the right accounting software for your business, you
should understand these basic accounting terms:
Asset-A tangible or intangible object of value to its
owner.
Liability-An obligation to another party.
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Income-Money received for goods or services produced or
as a return on investment.
Expense-Money spent for goods or services.
General Ledger-The main records of the assets,
liabilities, income and expenses of an organization.
Accounts Payable-A company liability; amounts due to
suppliers of goods or services.
Accounts Receivable-A company asset; amounts owed for
goods or services that have been supplied.
Capital-The net worth of the company; the assets less the
liabilities.
Double-entry accounting-A system in which the total of
all left-side entries is offset by an equal total of right-side
entries. Left-side entries are known as debits, and
right-side entries are known as credits. A debit or a credit
can be applied to any general ledger account, whether it's an
asset, a liability, capital, income or an expense.
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