The business world has its own jargon and slang. Those not immersed in the accounting industry may be baffled by the jargon and slang commonly used there. So that you can communicate effectively with your accountant in Bixby, OK, you must know the terminology.
- Certified Public Accountant is what the initials of CPA stand for. Those letters after a name signify professional accounting expertise and are commonly recognized as such. Before a person may put those initials after their name, they must complete rigorous educational and professional experience criteria, as well as pass a problematic national uniform exam.
- Cash, inventory, equipment, buildings, goodwill, and patents are all examples of tangible assets.
- All of an entity’s financial obligations are also known as its liabilities.
- Taxes are the principal method by which governments collect revenue from their subjects to fund public services and initiatives. Income tax, payroll tax, sales tax, and property tax are only some of the various types of taxes.
- The balance sheet is a snapshot of a company’s financial situation, detailing its assets, liabilities, and net worth (also known as equity or stockholders’ equity).
- A corporation has a continuous existence independent of its members, and authorities and obligations are separate and distinct.
- To qualify as an S-Corporation, a company must have fewer than 100 shareholders, be owned primarily by individuals, and have just one class of stock. Profits from an S-Corporation are reported on Schedules K-1 and filed with the IRS using Form 1120S.
- A “sole proprietor” is the owner of a business who is neither a member of a partnership nor a shareholder in a corporation.
- An “enrolled agent” is a tax professional authorized to represent taxpayers before the Internal Revenue Service (IRS) on behalf of taxpayers.
- The IRS Form 1099 reports income other than wages, salaries, and tips. Different types of 1099s require different forms to be filled out and submitted to the Internal Revenue Service and the recipient at the start of each tax year.
- A profit and loss statement (PNL) is a financial report that summarizes a business’s performance and financial situation by looking at the company’s income, expenses, and other critical metrics over a certain period, typically a quarter or year.
- Several states levy franchise taxes on businesses that operate inside their borders. Franchise taxes are not levied in every state, and in those that are, sole proprietors who are exempt from registration may not have to pay them.
- To authorize a tax preparer or business to submit your taxes electronically, you must fill out an E-file form, which the Internal Revenue Service and several state tax agencies need.
