Avoid misunderstanding. Avoid confusion. Be a boss and bookmark this one for future reference.

Balance Sheet: A report that documents your company’s financial position. Think of the formula as ALE, or Assets = Liabilities + Equity.

Costs of Goods Sold: Direct costs related to the production of your company’s products.

Expenses: Costs incurred in the ordinary course of business.

Accounts Payable: The amount of money you owe suppliers, vendors, etc.

Accounts Receivable: The amount of money owned to you by customers or clients.

Chart of Accounts: A master of all your company’s accounts (assets, liabilities, equity, revenue, expenses).