Financial Statements


Vocabulary

Income and Expense Statement

Income

Money that we receive for good and services during the reporting period

Expenses

Money that we spent during the period for goods and services

Gross Expenses

Income less Expenses

Taxes

Income taxes you pay, or that are taken out of our paycheck

Net Income/Loss

Difference between Income and Expense

Balance Sheet

Assets

Assets are the of the things we own or have and their dollar value. For example we could have money in checking or savings.We could own a house that has some value.

Liabilities

The things and total amount we owe on a loan against our assets.

For example, we have a mortgage on our house or a loan against our car. We can also owe money on a department store charge card or bank credit card.

Net Worth

Net worth is the difference between our assets and liabilities. If our net worth is negative we owe more than what we have. We are technically bankrupt.

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