When we started developing Color Accounting as a better way to teach accounting and business acumen, we thought color was the biggest deal. Now I believe it’s words.
To understand financial statements, you first have to understand the words. Without the words, the numbers are meaningless.
To understand financial statements, you first have to understand the words. Without the words, the numbers are meaningless.
Some of the radical things we do with words include thinking of revenue more as a verb than a noun.
And pointing out the ambiguity of words that we use everyday. Is ‘income’ closer to ‘sales’ or ‘profit’? Europeans say the former, Americans the latter.
We also seek to define accounting terms as simply as possible, identifying Revenue as 'value generating activity' and Expense as 'value sacrificing activity.'
What is the worth of words? Well, many firms have gone bankrupt simply by confusing revenue for cash.
Best regards, Peter
And pointing out the ambiguity of words that we use everyday. Is ‘income’ closer to ‘sales’ or ‘profit’? Europeans say the former, Americans the latter.
We also seek to define accounting terms as simply as possible, identifying Revenue as 'value generating activity' and Expense as 'value sacrificing activity.'
What is the worth of words? Well, many firms have gone bankrupt simply by confusing revenue for cash.
Best regards, Peter
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