Question

10 basic termonies if accounting​

Answer 1

Answer:

Here are ten accounting term definitions to get you started to effectively communicate with your online accounting services provider.

1 . Assets. ...

2 . Balance sheet. ...

3 . General ledger. ...

4 . Gross margin. ...

5 . Loss. ...

6 . On credit/On account. ...

7 . Receipts. ...

8 . Revenue.

9 . Trade discount

10 . Trial balance

Answer 2

ANSWER :

✯ Ten basic terminologies of Accounting are explained below :-

• [1] Entity : The term Entity is an abstract one which is used to mean an organisation that has a separable and different identity from its members accounting is always done for an entity may be a business or non business entity is usually called accounting entity. For example :- M/S Furnico, Assam Cricket Association, Relience Industries Ltd. etc.

• [2] Proprietor : Proprietor is a individual or group of person who on a business. All the business risks are undertaken by the proprietor(s) as the required amount of capital is provided by them. The proprietor is the owner of of the business enterprise.

• [3] Capital : The amount brought in by the proprietor(s) and invested in a business enterprise for carrying on the business operations is called Capital. It is the amount with the help of which goods and assets are purchased in the business. Capital is also known as Owner's Equity or Net Worth or Net Assets.

• [4] Assets : Anything which is in the possession or is the property of a business enterprise is called an Asset. Assets are the things which a business purchases for the purpose of use in the business and hence these are not meant for resale. It also includes any amount receivable from the others. Therefore, anything which enables a business enterprise to generate benefit in future is an Asset. For example :- Land & Buildings, Plant & Machinery, Cash-in-hand, Debtors, Goodwill etc.

• [5] Liabilities : The amount whose platform is required to pay in future is known as Liability. It is the future monetary obligation of the enterprise. Obligation of the enterprise may be divided into obligation to owner known as Capital and obligation to outsider which is known as Liability.

• [6] Drawings : Amount of cash or value of goods withdrawn by the owner or proprietor from the business for personal use or for any private purpose is known as Drawings. It is the amountof cash or goods which is withdrawn by the owner of the business for any kind of personal use.

• [7] Purchase : In accounting, the term Purchase means the purchase of goods in which the business deals in. Goods may be purchased either in cash or in credit. If the goods are purchased by making payment in cash or by cheque, it is called cash purchase and if the goods are purchased on condition that the payment will be made at a future date, then the purchase is termed as credit purchase.

• [8] Sale : In accounting, the term Sales is used only for the sale of thos goods which are purchases for the purpose of resale. It is not used for the sale of any asset of the business. Unlike purchase, sales of goods may be either in cash on credit.fIf the goods are sold and cash received at the time of sale, it is called cash sale and if the goods are sold on condition that the payment will be made at a future date it is known as credit sale. Sales implies the price at which the goods were sold.

• [9] Monetary Event : An event who changes the financial position of a person or business is known as a Monetary Event. In accounting, only those event which causes a change in the financial position of an entity are recognise as eveny and thus all monetary events are recognised and recorded in accounting.

• [10] Business Transaction : A monetary event which is related to a business is called Business Transaction. In other words, every activity of financial nature; having documentary evidence; measurable in terms of money; causing an effect on asset, liability, capital, revenue or expenses is termed as Business Transaction.