Accounting Terms For Everyday

Find Here The Basic Accounting Terms that we used in our day to day life

Entity means a thing that has a definite individual existence.

Transaction: A event involving some value between two or more entities.

Assets are economic resources of an enterprise that can be usefully expressed in monetary terms.

Liabilities are obligations or debts that an enterprise has to pay at some time in the future.

Amount invested by the owner in the firm is known as capital.

Sales are total revenues from goods or services sold or provided to customers.

These are the amounts of the business earned by selling its products or providing services to customers, called sales revenue.

Costs incurred by a business in the process of earning revenue are known as expenses.

Spending money or incurring a liability for some benefit, service or property received is called expenditure.

The excess of revenues of a period over its related expenses during an accounting year profit. Profit increases the investment of the owners.

Gain: A profit that arises from events or transactions which are incidental to business such as sale of fixed assets, winning a court case, appreciation in the value of an asset.

The excess of expenses of a period over its related revenues its termed as loss. It decreases in owner’s equity.

Discount is the deduction in the price of the goods sold. Trade Discount & Cash Discount.

The documentary evidence in support of a transaction is known as voucher.

Goods refers to the products in which the business units is dealing, i.e. in terms of which it is buying and selling or producing and selling.

Withdrawal of money and/or goods by the owner from the business for personal use is known as drawings.

Purchases are total amount of goods procured by a business on credit and on cash, for use or sale.

Stock (inventory) is a measure of something on hand-goods, spares and other items in a business.

Debtors are persons and/or other entities who owe to an enterprise an amount for buying goods and services on credit.

Creditors are persons and/or other entities who have to be paid by an enterprise an amount for providing the enterprise goods and services on credit