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Corporate Accounting & Financial Management - Coggle Diagram
Corporate Accounting & Financial Management
[LEFT] 1. Financial Statements & Structure
Balance Sheet (Health at a specific date)
Asset
Def: Value owned generating economic benefits
Ex: $15k office servers
Liability
Def: Financial debts or legal obligations owed
Ex: $50k bank loan
Equity
Def: Net worth (Assets minus Liabilities)
Ex: $100k Assets - $40k Liab = $60k Equity
Income Statement (Net results over a period)
Revenue / Income
Def: Gross earnings from sales or services
Ex: $20k monthly subscription sales
Expense
Def: Operational costs to run the business
Ex: $2k monthly electric & internet bill
Profit
Def: Net financial gain when Revenue > Expense
Ex: $50k Rev - $30k Exp = $20k Profit
Loss
Def: Financial deficit when Expense > Revenue
Ex: $15k Exp - $10k Rev = $5k Loss
[TOP/CENTER] 2. Transactions & Business Documents
Transaction
Def: Commercial exchange affecting financial position
Ex: Buying raw materials for $1,200 cash
Journal Entry (First chronological system entry)
Ex: Entry on March 5 for $500 office supplies
Debit
Def: Left-side entry (increases Assets & Expenses)
Ex: Debit $1k to Equipment Account
Credit
Def: Right-side entry (increases Liabilities & Revenue)
Ex: Credit $1k to Cash Account
Account (Individual record tracking similar items)
Def: Category to group operations
Ex: Main Cash Account
Ledger
Def: Master book aggregating all posted accounts
Ex: End-of-month General Ledger check
Source Documents
Invoice
Def: Commercial document requesting payment
Ex: $3k design bill due in 30 days
Receipt
Def: Proof of completed payment
Ex: Customer receipt for $45 headset
[RIGHT] 3. Costs, Taxes & Financial Management
Cost
Def: Direct outlay required to produce goods/services
Ex: $25 direct material to build a chair
Tax
Def: Mandatory government charge on income/sales
Ex: Annual corporate income tax
VAT (Value Added Tax)
Def: Sales tax added at each stage of supply chain
Ex: $100 item + 19% VAT = $119 final price
Budget
Def: Plan projecting future revenue and expenses
Ex: $10k advertising budget for Q3
Cash Flow
Def: Real-time movement of physical cash in and out
Ex: Negative flow due to delayed client payments
Payroll
Def: Record and distribution of employee salaries
Ex: Monthly salary payout on the 25th
Interest
Def: Financial cost of borrowing or yield earned
Ex: $200 monthly interest on business credit
Audit
Def: Independent verification of accounting records
Ex: External firm verifying company books