Understanding summary of brokerage account value, cash balance, buying power?
Here you go: I'll leave the last question as an exercise to the reader.
"From your question, I believe that you are looking for what these mean in accounting terms and not the difference between a debit and a credit card. I'll deal with purchase and sale first as this is easier. They are the same thing seen from different points of view. If I sell something to you then I have made a sale and you have made a purchase. Every sale is a purchase and every purchase is a sale. Debits and Credits are accounting terms and refer to double column accounting (the most common accounting system used). The way a set of accounts works is, accounts are set up under the following broad headings: The first 3 appear on the Balance Sheet, so called because the accounts balance (Assets = Liabilities + Equity). This is always a ""point-in-time"" snapshot of the accounts (1 June 2015). That last 3 appear on the Profit and Loss sheet, Profit (or loss) = Income - Cost of Goods Sold - Expenses. This is always an interval measure (1 July 2014 to 30 June 2015). Changes in these accounts flow through to the Equity part of the Balance Sheet. When you enter a transaction the Debits always equal the Credits, they are simply applied to different accounts. Debits increase Assets, Cost of Goods Sold and Expenses and decrease Liabilities, Equity and Income. Credits do the reverse For your examples: 1. a customer buy something from me, what is the debit and credit? I will assume they pay $1,000 and the thing cost you $500 Your cash (asset) goes up by $1,000 (Debit), your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This gives you a profit of $500. 2. a customer buy something of worth 1000 but gives me 500 what is     debit and credit Your cash (asset) goes up by $500 (Debit), your debtors (asset) goes up by $500, your inventory (asset) goes down by $500 (Credit), your Sales revenue (income) goes up by $500 (credit). This also gives you a profit of $500. 3. if I buy a product from supplier worth 1000 and pay equally what is credit and debit I assume you mean pay cash: Your cash (asset) goes down by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have swapped one asset (cash) for another (inventory). 4. if I buy a product from supplier worth 1000 and don't pay what is credit and debit Your creditors (liability) goes up by $1000 (Credit), your inventory (asset) goes up by $1000 (Debit). There is no profit or loss here - you have gained an asset (inventory) but incurred a liability (creditors). The reason for confusion is that most people only see Debits and Credits in one place - their bank statement. Your bank statement is a journal of one of the banks liability accounts - its their liability because they owe the money to you (even loan accounts adopt this convention). Credits happen when you give money to the bank, they credit  your account (increase a liability) and debit their cash balance (increase an asset). Debits are when they give money to you, they debit your account (decrease a liability) and credit their cash balance (decrease an asset) . If at the end of the period, you have a credit balance then they owe money to you, a debit balance means you owe money to them. If you were keeping a book of accounts then your record of the transactions would be a mirror image of the bank's because you would be looking at it from your point of view." If you buy a CD through a brokerage, the trade confirmation will indicate whether the CDs is FDIC insured. Unless you have authorized the broker (in writing) to exercise discretion in your account, meaning they can act in your account without contacting you first, they must contact you and discuss the specific investment with you before buying it. If they have misled you and the CD is not actually FDIC insured, you have a right to ask them to reverse the transaction.  Keep in mind that brokerages are also required to insure the assets in your account which they hold on their balance sheets (cash, bonds, stocks, mutual funds, but not commodities). This is provided by SIPC, the equivalent of FDIC in the brokerage world. Most large brokerages also insure you beyond the SIPC minimum. Keep in mind, unlike FDIC, you're not insured against market risk, only against a bankruptcy of the brokerage. Also, SIPC is funded by the securities industry, not by the US Government. Since you've already maxed out your 401k and your IRA, if you wanted to invest more-- then it would either be in a brokerage account or a 529 (if you have kids/ intend on going back to school). As to investing versus paying off your loans -- the interest on them are small enough that it will depend on your preference.  If you need the cash flow for investment purposes (ie if you are going to buy an investment property) then I would pay off the car loan first -- otherwise I would invest the money.   Since you've already expressed that you wouldn't be too interested in paying the mortgage off early, I've left that off the table (I would prioritize car loan over mortgage for the cash flow reason)  If you do open a brokerage account -- make sure you are minimizing your taxes by putting the 'right' type of assets in a tax advantaged account. Most ETFs are index funds, meaning you get built in diversification so that any one stock going down won't hurt the overall performance much. You can also get essentially the same index funds by directly purchasing them from the mutual fund company. To buy an ETF you need a brokerage account and have to pay a transaction fee. Buying only $1000 at a time the broker transaction fee will eat too much of your money. You want to keep such fees way down below 0.1%. Pay attention to transaction fees and fund expense ratios.  Or buy an equivalent index fund directly from the mutual fund company. This generally costs nothing in transaction fees if you have at least the minimum account value built up. If you buy every month or two you are dollar cost averaging, no matter what kind of account you are using. Keep doing that, even if the market values are going down. (Especially if the market values are going down!)  If you can keep doing this then forget about certificates of deposit. At current rates you cannot build wealth with CDs. This is a tough question SFun28.  Let's try and debug the metric. First, let's expand upon the notion share price is determined in an efficient market where prospective buyers and sellers have access to info on an enterprises' cash balance and they may weigh that into their decision making.  Therefore, a desirable/undesirable cash balance may raise or lower the share price, to what extent, we do not know.   We must ask How significant is cash/debt balance in determining the market price of a stock?   As you noted, we have limited info, which may decrease the weight of these account balances in our decision process. Using a materiality level of 5% of net income of operations, cash/debt may be immaterial or not considered by an investor. investors oftentimes interpret the same information differently (e.g. Microsoft's large cash balance may show they no longer have innovative ideas worth investing in, or they are well positioned to acquire innovative companies, or weather a contraction in the sector) My guess is a math mind would ignore the affect of account balances on the equity portion of the enterprise value calculation because it may not be a factor, or because the affect is subjective. Efficient Frontier has an article from years ago about the small-cap and value premiums out there that would be worth noting here using the Fama and French data. Eugene Fama and Kenneth French (F/F) have shown that one can explain   almost all of the returns of equity portfolios based on only three   factors: market exposure, market capitalization (size), and   price-to-book (value). Wikipedia link to the factor model which was the result of the F/F research. Something like cost = a × avg_spreadb + c × volatilityd × (order_size/avg_volume)e. Different brokers have different formulas, and different trading patterns will have different coefficients. You're confusing open positions and account balance. Your position in GBP is 1000, that's what you've bought. You then used some of it to buy something else, but to the broker you still have an open position of 1000 GBP. They will only close it when you give them the 1000GBP back. What you do with it until then is none of their business. Your account balance (available funds) in GBP is 10.