Financial Terms “E”


Financial Terms Dictionary

E


Equity

Equity is a claim on the assets by the owners of a business. It is calculated as assets minus liabilities. Equity is one of the five types of accounts. Equity is shown on the balance sheet and is the net worth of the business. Equity is also called stockholders’ equity or shareholders’ equity.

Expense

Expenses occur when assets are consumed by a business. Expenses are one of the five types of accounts. They are shown on the income statement.


Jeff Mankin

Jeff Mankin teaches financial literacy. His website is FinallyLearn.com.

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Expense

What is an expense? Expense is a cost to operate a business to produce revenue. In accounting, an expense occurs when an asset is used. This could include a cash outflow or consuming an...