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12 Basic Accounting Terms All Business Owners Should Know
Not included in this category are those costs that are needed to run the business. An example of COGS would be the cost of Materials, or the Direct Labor to provide a service. All debts that a company has yet to pay are Balancing off Accounts referred to as Liabilities. Common liabilities include Accounts Payable, Payroll, and Loans. Inventory is the term used to classify the assets that a company has purchased to sell to its customers that remain unsold.
Although the IRS allows all businesses to use the accrual method […]