What is accounting term used Account?

What is accounting term used Account?
Basic terms used in accounting
1. Financial/ business transaction: the transaction which show at least, a financial character i.e. the involvement of money of money's worth, are knows as th
2. Capital: this means an amount which the proprietor has invested in the or can claim from. It is also ca. called "owner's equity".
3. Liability: this means an amount owing to outsiders who are not owners. Liabilities are claims of creditors against the enterprise i.e. the amount owners to creditors. Liability may be classified as follows:
• Current liability: current liabilities refer to those liabilities which fall due for payment in a relatively short period. For example, bills payable, trade creditor, outstanding expenses, bank overdraft.
• Long term liability: long term liabilities refer to those liabilities which do not fall due for payment in a relatively short period. For example, long terms loans, debentures etc.
4. Drawings: the term drawing refers to the total amount a cash or any other assets withdrawn by the proprietor for personal use.
5. Assets: these are the valuable recourses owned by a business and acquired at a measurement money cost. In simple words, an asset means a property of all sorts of a business. For example, when a firm pays for a building or for a motor truck, it acquires an asset. Similar is the case if one purchases trade mark. There are various types of assets.
• Fixed assets are those assets which are acquired only for use in the long run and not for resale, for instance, plant and machinery, land and building.
• Current or flooring assets are those that are meant to be converted into cash as soon as possible. Stock of goods amount due from customers (book debts), balance at bank, etc. are examples.
• Liquid assets are those current assets which are already in cash from or which can be ready converted into cash, such as government securities and shares.
• Wasting assets are those fixed assets which will surely lose their value because of use. Minus are very good example because when the minerals re taken out, a mine will become useless.
• Intangible asset are those fixed assets which cannot be seen our touched or felt. Goodwill (the value of one's name) is an intangible asset because there is no physical form to show for it. Intangible assets are not necessarily valueless.
• Fictitious assets are values assets (such as unless trade marks), or expense treated as assets (such as expenses incurred to establish a company, known as preliminary expenses).
6. Revenue: this is the amount a business gains as a result of its operation. It a business sells goods to customers, the gross income resulting from these is called revenue. Any business transactions that generate revenue are classified s revenue transactions. Examples of expenses are sale of goods to customers, commission earned, rent income earned etc.
7. Expense: this is the amount of resources used in order to produce and sell goods and service which generate revenue. In other expenses are purchases of goods, payment of rent, payment of commission to salesman etc.
8. Income: the term income should not be confused with revenue. Income is the difference between revenue and expenses (when revenue is more than expense), which is also known as profit. In case revenue is less than expenses, the difference is called loss.
9. Purchase: the term purchase is used to mean acquiring of goods. Goods are those tangible things which are purchased for resale at a profit. In case of manufacturing firms, purchase means purchase of raw materials for conversion into finished goods and then to be sold. In case of trading firms, purchase means purchase of those goods in which firm deal for the purpose of sale at a profit.
10. Sales: the term sales mean exchange of goods or service for money. Sales refer to of sale of goods only either on cash basic or on credit. It includes sales of other items like sale of old machinery, sales of old newspaper etc.
11. Stock (inventory): this term refers to unsold goods lying in business
• Stock consists of the following:• Stock of raw material to be used for manufacture of goods,
• Stock of semi-finished goods which are in the process of manufacture,
• Stock of finished goods.
Stock may be opening stock or closing stock, opening stock means unsold goods lying in the beginning of the accounting year and closing stock. Opening stock means unsold goods lying in the beginning of the accounting year and closing stock means unsold goods lying at the end of the accounting year.
12. Debtors: when goods are sold on credit, the person to whom goods are sold and who owes money to the for is called debtors. Thus debtors are the person from whom a business has to receive money on account of sale of good on credit.
13. Creditors: when goods are purchase on credit the person to whom money is owing by the firm is called creditors. Thus creditors are the person to whom the business owes money on account of purchase of goods or services on credit.
14. Voucher: it is a written record and documentary evidence of a transaction. For example cash memo, received for payment made, invoice etc.
15. Loss: loss is usually taken to include expenses also but strictly speaking. 'Loss should be used for money or money's worth given off without any benefit. 'For example, goods destroyed by fire, payment of damages to others etc.

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e finance
e financial or business transaction. Purchase of goods, sales of goods, purchase of assets,
cial or business transaction. Purchase of goods, sales of goods, purchase of assets,

e financial or business transaction. Purchase of goods, sales of goods, purchase of assets, raising of capital, borrowing loan, payment of expenses like wages, salaries of assets, raising of capital receiving income are the examples of financial transaction.