Income Categories:

• Sales Revenue: Money generated from the direct sale of your main products or services.

  **Example:** 10 t-shirts sold at $20 each is $200 Sales Revenue.

• Service Revenue: Money received for providing services.

  **Example:** Receiving $500 from consulting services provided to a client.

• Other Income: Any other income aside from your main sales or services.

  **Example:** Interest accrued on a business savings account or selling used office equipment.

Expense Categories:

• Rent Cost: Cost of renting business premises, a store, or machinery.

  **Illustration:** Payment for a $1,000 monthly office rent.

• Utilities Costs: These include expenses for services such as electricity, water, gas, and internet.

  For instance, you might pay $150 for electricity every month.

• Salaries Expense: Payments to employees as wages for work.

  **Example:** Paying your weekend worker $800 for the month.

• Marketing Expense: This is the money you spend to promote your business.

  **Example:** Putting $200 into a social media advertising campaign.

• Other Expenses: All other operating expenditures of your company not covered under other given categories.

  **Illustration:** Office supplies, minor maintenance, or software subscription.

Asset Classes:

• Cash: Actual money in possession.

  **Example:** Draw money out of your firm's petty cash box or cash drawer.

• Bank: Funds in your business savings and checking accounts.

  **Example:** The balance of your savings or business checking account.

• Accounts Receivable: Amounts owing to your business by customers in credit sales.

  Imagine you sold an item to a customer for $300, and they’ll pay you next month.

• Fixed Assets: These are long-term things your business owns that you don’t plan to sell, like office buildings, heavy machinery, vehicles, or big computer systems.

Liability Categories:

• Accounts Payable: This is the money your company owes to suppliers or vendors for goods or services you received on credit.

  For instance, if you bought printer ink for $150, you need to pay for it next week.

• Loans Payable: This is the money your business has borrowed that needs to be repaid.

  This could be a loan from a bank or from a private lender.

Equity Categories:

• Owner's Capital: Is the money or property that the owner first invests in the business.

  For example, if you put in $5,000 of your own money to start the business, that’s your capital.

• Retained Earnings: This refers to the profits your business has made that you’ve kept to use for reinvesting instead of paying them out to owners.

  For instance, if your business earned $1,000 last year and you decided to use that money to buy new equipment, that’s retained earnings.