The right terminology
Lots of industries have their own terminology and the accounting industry is no different. It is important to be aware of the terminology because, as a business owner, you will no doubt have conversations with your accountant and other professionals regarding your financial matters. If you wish to borrow money from a financial institution, such as a bank, you will be asked to provide some financial information. An example of this would be; a statement of financial position, an income statement and cashflow statement. These are common reports that are requested by financial institutions.
As a business owner, reading and interpreting your financial reports will tell you how your business is performing. While you progress through the different stages of setting up your own online small business, it is recommended that you familiarise yourself with the commonly used terminology. In the ‘Pricing and Finance Plan’ you will find a list of the most common terminology used when focusing on small business product pricing.
You can test out your terminology skills with the Teminology Game.
Alternatively there is a PDF version of the answers in the Downloads area.
© RMIT University 2016