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Today we’re going to learn some vocabulary related to accounting.

The first term is balance sheet (balanço, balancete). A balance sheet states a company’s assets (ativos, patrimônio) and liabilities (débito, passivo). That is, what a company has (assets) and what it owes (liabilities).

Assets are what a company has that can be turned into cash. There are tangible and intangible assets. Tangible assets are those which are physical, like equipment, machinery, buildings, etc. Intangible assets are very hard to evaluate because they lack physical value, like patents, franchising, goodwill, trademarks, etc.

Liabilities are what a company owes to another company or to an individual. They can come in the form of accounts payable (contas a pagar), bank loans (empréstimos bancários) or outstanding taxes (impostos pendentes).

We have short-term (curto prazo) liabilities and long-term (longo prazo) liabilities. Short-term liabilities have to be paid within a year, whereas long-term liabilities can be paid in more than a year.

Now we are going to talk about profit (lucro). Profit is the money you make when you sell something or do business and all expenses have been paid. We can make, earn or turn a profit. It can be a big, huge, healthy, substantial, handsome or hefty profit. There is also net profit (lucro líquido), after tax and costs are paid, and gross profit (lucro bruto), before tax and costs are paid.

The opposite of profit is loss (perda), which is negative profit. We can say that a company made a loss, took a loss or is running at a loss.

Now let’s check the words gross and net.

A gross (bruto) amount of money means the total amount before costs and taxes have been taken away. We have a gross profit (lucro bruto), gross income (renda bruta), gross revenue (receita bruta).

Gross is also a verb meaning earning a total profit, without taking away the taxes and costs. We say that a Hollywood movie grossed (arrecadou) $10 million dollars on the first weekend.

Net (líquid0) is the opposite of gross. A net amount of money is the one where all deductions have been made. We have net profit (lucro líquido), net loss (perda líquida), net worth (valor líquido), net weight (peso líquido).

Net is also a verb, which means to earn a particular amount of money as a profit, after all deductions have been made. We can say that a person was netting (ganhando dinheiro livre) $100,000 a year.

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