Financial Statements: a formal record of the financial activities and position of a business, person, or other entity

Balance sheet: a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and spending over the stated period.

Liabilities: financial obligations, debts, dues or any other money owed.

Capital: wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.

Accounting Equation: Assets = Liabilities + Owner's Equity.

Merchandise Inventory: a current asset with a normal debit balance meaning a debit will increase and a credit will decrease.