--- title: Young Entrepreneur's Glossary description: The young entrepreneur's glossary is a great resource for people looking to strike out on their own. Get definitions, links, and more to valuable info. image: https://www.ignitespot.com/hubfs/young%20entrepreneurs%20glossary.jpg --- [**Call us at   1-855-694-4648           ** ](tel:1-855-694-4648) [![squareyoutube_copy](https://www.ignitespot.com/hubfs/2021_IgniteSpot/YOUTUBE.png "youtube")](https://www.youtube.com/channel/UCimfeJCvdyYVasnJCdMQhsw) [![facebook](https://www.ignitespot.com/hubfs/2021_IgniteSpot/FACEBOOK.png "facebook")](https://www.facebook.com/ignitespot/) [![IgniteSpot_logo](https://www.ignitespot.com/hs-fs/hubfs/2021_IgniteSpot/IgniteSpot_logo.png?width=187&height=72&name=IgniteSpot_logo.png "IgniteSpot_logo")](https://ignitespot.com) [![IgniteSpot Logo](https://www.ignitespot.com/hs-fs/hubfs/2021_IgniteSpot/IgniteSpot_logo.png?width=187&height=72&name=IgniteSpot_logo.png) ](https://www.ignitespot.com/) Menu ☰ # The Young Entrepreneur's Glossary Written by [Eddy Hood](https://www.ignitespot.com/eddy-hood) Working as an entrepreneur can be a satisfying way to earn money, but anyone preparing to start a small business or test the waters as a new entrepreneur will need a firm grasp of the terms and vocabulary that are used daily in the business world. Knowing these professional terms will help you present yourself as a knowledgeable expert in your field and understand the ins and outs of managing your business. Whether you choose to outsource some of the aspects of running a small business, such accounting and tax preparation, or you plan to do it yourself, you'll need to know and understand these terms. **Account Payable:** An account payable is a claim that is owed to a creditor to pay for goods or services received. **Account Receivable:** An account receivable is a claim for an uncollected amount against a debtor for a completed transaction. **Acquisition:** When a company takes over the controlling interest of another company, this is an acquisition. **Adjusted Gross Income:** Adjusted gross income is take-home income, which is reduced by specified expenses such as federal and state taxes. It's a key figure when filing income taxes. **Asset:** An asset is a tangible or intangible object that has an economic value that will benefit a business. **Bankruptcy:** Filing for bankruptcy is a legal process in which debts are liquidated after using the debtor's assets to satisfy as many debts as possible. **Business Valuation:** A business valuation is an estimate of the total value of the company and its assets. **Collateral:** Collateral includes assets that are pledged to a creditor to secure a loan. **Creditor:** A creditor is the party that loans money or sells another type of asset to someone else. **Debt:** A debt represents an amount owed, and it might consist of goods, services, bonds, notes, or money. **Deficit:** A deficit occurs if there is more debt than resources to cover that debt. **Earned Income:** Earned income includes fees, wages, salaries, and other funds earned as compensation for providing a service or goods. **Exemption:** An exemption is a portion of a taxpayer's income that isn't taxed. All taxpayers qualify for at least one exemption unless someone else claims them as a dependent on a tax return. **Expense:** An expense is an amount spent on a service or item to use for a specific purpose. **Fiscal Year:** A fiscal year is a 12-month period that makes up an entity's accounting period. Fiscal years don't necessarily correspond with calendar years. **Fixed Costs:** Fixed costs are costs that stay constant within a specific time period or range of activity. **General Journal:** A general journal is a flexible and simple type of journal. **In Arrears:** If something is noted as in arrears, it hasn't been paid at the agreed time and is overdue. **Independent Contractor:** An independent contractor is a person who offers services to the public. Someone contracting with an independent contractor for a service or goods has the right to control or direct only the result of the work performed, not the methods used to accomplish the end result. **Joint Venture:** A joint venture is a legal entity that is created by two or more businesses that join together for a specific enterprise. Both parties share profits and losses. **Line of Credit:** A line of credit is a loan for which the borrower pays interest only on the amount borrowed, making periodic payments to pay back the balance. **Merger:** A merger is the joining together of two corporations. With a legal merger, the two formerly separate businesses dissolve and move all assets and liabilities into the new business entity. **Outsourcing:** Outsourcing involves purchasing services or goods from outside companies, which may include accounting, tax preparation, payroll services, or advertising. **Sales:** Sales include the exchange of a product or service for payment. Companies may also have a sales department or sales representatives who work to increase the number of products or services sold. **Venture Capital:** Venture capital is a type of financing that involves a business giving up a percentage of its ownership and control in exchange for funding. Venture capital agreements have a specific time frame. ## Additional Resources - [Five Bookkeeping Tips for Business Owners](https://www.entrepreneur.com/article/219517) - [Ten Tips for Better Small-Business Bookkeeping](https://www.score.org/blog/10-tips-better-small-business-bookkeeping) - [Ten Tips for Entrepreneurs Who Are Doing Their Own Bookkeeping](https://www.businessinsider.com/10-tips-for-entrepreneurs-who-are-doing-their-own-bookkeeping-2014-7) - [Five Useful Accounting Tips for Small Businesses](https://www.business.org/finance/accounting/useful-accounting-tips-for-small-businesses/) - [Bookkeeping and Accounting Basics](https://www.nolo.com/legal-encyclopedia/bookkeeping-accounting-basics-29653.html) - [Top Seven Bookkeeping Tips for Small-Businesses Owners](https://aceloans.org/effective-bookkeeping-tips-for-small-businesses/) - [Legal and Accounting Tips for Small Businesses: Five Things You Must Know](https://cashmoneylife.com/small-business-accounting/) - [Accounting and Bookkeeping Tips for Small-Business Owners](https://www.opencolleges.edu.au/careers/blog/accounting-bookkeeping-tips-small-business-owners) - 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