Finance
Accrual accounting
Recording revenue when earned and expenses when incurred, rather than when cash moves.
Explanation · worked example · knowledge checkFinance
Saving, borrowing, business accounts and managing money.
How does money work in practice?
Start with a concept below, or follow a connected learning path. Definitions are starting points: assumptions and evidence determine how an idea applies.
Finance
Income statement
A report of revenue, expenses and profit or loss over a period.
Explanation · worked example · knowledge checkFinance
Balance sheet
A snapshot of assets, liabilities and equity at a particular date.
Explanation · worked example · knowledge checkFinance
Compound interest
Interest calculated on both the original amount and accumulated interest.
Explanation · worked example · knowledge checkFinance
Emergency fund
Money set aside for unexpected necessary expenses or an interruption to income.
Explanation · worked example · knowledge checkFinance
Cash flow
Cash coming into and going out of an activity over a period.
Explanation · worked example · knowledge checkFinance
Working capital
Current assets minus current liabilities: a measure of short-term financial position.
Explanation · worked example · knowledge checkFinance
Break-even point
The sales level at which total revenue equals total costs under stated assumptions.
Explanation · worked example · knowledge check