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Before I can explain what an expense is, I will need to talk about costs. A costs is what you give up in your business to make money. A cost can be either an asset or expense. For example, an internet business will need a website so will have to give up cash to host its website. An expense is a cost that is used up within short period of

Revenue is anything you earn in exchange for providing a product, service or an asset for use. Revenue could include cash, cows, dogs, etc. In short, anything you get back in return for providing something of value while running your business is income to you. Obviously, if you get any item other than cash, you will have to include the fair market value of the item received as income. There

Assets are what you own, liabilities are what you owe and equity is the difference between your assets and your liabilities. In other words, equity is the net worth of a business. In accounting a clear distinction is made between the owner and the business. Therefore, any funds contributed by the owner is seen as a claim against the business. This means that if the business dissolves, the owner can

To have a liability means that you are obliged to satisfy a debt. In simple terms, a liability is what you owe. Liabilities can take on 3 forms namely: Cash you owe to your lenders Cash owed for goods received but not paid Obligations you owe your customer Cash you owe lenders Cash you owe lenders is money borrowed from a bank or any other lending institution. When you have liabilities

Lack of measurement is one of the reasons most people don't accomplish their goals. This episode discusses how financial milestones can be a useful tool for measuring progress towards your goal