daily expenses incurred in the operation of a business

They include tangible and intangible things of value gained through the company’s ongoing transactions.Īssets come in all shapes and sizes. AssetsĪn asset is anything that your company owns that can be converted to cash or has the capacity to generate revenue. They consist of assets, liabilities, equity, revenue and expenses. There are five types of accounts that show up on both your balance sheet and income statement.

Specifically, we’ll cover expenses and liabilities and go over what makes these two different from each other. Today, we’ll dive into the different account types you need to know and what goes into each. You may handle your balance sheet, income statements and cash-flow statements yourself or outsource the duties to an accountant, but regardless, you’ll want to understand how each of these work. Staying on top of your financial statements is just one crucial aspect of your operations, but it will help you know your business inside and out. One day, you’re the marketer, and the next, you’re the accountant. As you organize your financials, you may wonder, “Are expenses liabilities?”Īs a small business owner, there’s a good chance you’re wearing several hats at once. Whether it’s pulling together your balance sheet or organizing your income statement, you’ll likely stumble across some questions. It’s that time again-the time of the year to switch gears and start thinking about the accounting aspects of your business.

Daily expenses incurred in the operation of a business