Making a Living from Your eBay Business, Second Edition

Appendix A.Accounting Basics

For those of you who slept through your college accounting classes, this appendix will help you brush up on just enough basic accounting to help you manage your burgeoning eBay business.

What follows are the key financial concepts that describe how a business is doing, money-wise.

Revenues, Expenses, and Profits

Three related concepts are key to the running of any business:

• Revenues. Revenues (also called sales) are the dollars you generate by selling your products. There are two types of revenues: gross revenues and net revenues. Gross revenues are the straight sales dollars you record; net revenues are your sales dollars less any returned or discounted sales. Revenues never have any costs or expenses deducted. ...