Financial accounting terms, legal contract definitions, intellectual property types, and corporate structures.
Revenue is the total amount of money a business collects from sales of goods or services before any expenses are subtracted ('top-line growth'). Profit is the actual financial gain remaining after deducting all operating costs, taxes, debt, and inventory expenses ('bottom-line earnings').
An invoice is a formal billing request sent by a seller to a buyer before or immediately upon delivery of goods, detailing agreed payment terms and amount due. A receipt is an official proof of payment issued after the buyer has successfully paid, confirming the transaction is settled.
A trademark protects commercial brand identifiers—such as logos, brand names, slogans, and trade dress—to prevent consumer confusion in the marketplace. A copyright protects original creative and artistic works fixed in a tangible medium—such as books, songs, software code, videos, and artwork.
A sole proprietorship is an unincorporated business automatically owned by one individual with zero paperwork, but provides zero liability protection—meaning your personal savings, home, and car can be seized to pay business debts. An LLC is a formal legal entity registered with the state that creates a corporate veil, protecting personal assets from business lawsuits.
A debit card withdraws your own deposited cash directly from your checking account in real time, preventing you from spending money you don't have. A credit card borrows the bank's money on a revolving line of credit with a grace period, offering superior fraud protection, travel rewards, and credit score building.
APR is the simple annual interest rate applied to money you borrow (loans, credit cards, mortgages) without accounting for the compounding of interest within the year. APY is the effective annual rate of return that includes compound interest, representing the true amount you earn on savings accounts or pay on compounding debt.
Gross pay is the total compensation an employee earns before any deductions—such as income taxes, Social Security, healthcare premiums, and retirement contributions—are taken out. Net pay ('take-home pay') is the final amount deposited into the employee's bank account after all mandatory and voluntary deductions.
Stocks represent fractional equity ownership in a company, offering high historical growth through capital appreciation and dividends but carrying higher volatility and risk of total loss. Bonds are debt instruments where you act as a lender to a corporation or government, receiving guaranteed periodic interest payments (coupons) and return of principal at maturity.
A 401(k) is an employer-sponsored retirement account funded with pre-tax dollars that lowers your current taxable income and often features matching company contributions, with withdrawals taxed in retirement. A Roth IRA is an individual account funded with after-tax dollars that offers completely tax-free growth and tax-free withdrawals in retirement.