Question

Define the following terminologies.
1) Accounting
2) Business Transaction
3) Capital & Drawings
4) Assets & Liabilities
5) Debtors & Creditors
6) Depreciation
7) Bad Debt
8) Fictitious Assets
9) Real Assets
10) Internal Liability
11) Intangible Fixed Assets
12) Current Liabilities
13) Current Assets
14) Non-Current Assets
15) Stock​

Answer 1

Answer:

1. Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities.
2. A business transaction is an event involving an interchange of goods, money or services between two or more parties. ... The business transacted can be between two parties engaged in business and conducting the transaction for their mutual benefits, or between a business entity, like a retail shop, and a customer.
3. Capital is a term for financial assets, such as funds held in deposit accounts and/or funds obtained from special financing sources. ... Capital assets can include cash, cash equivalents, and marketable securities as well as manufacturing equipment, production facilities, and storage facilities.

Drawings refers to the act of withdrawing cash or assets from the company by the owner(s) for personal use. Keep track of the money you withdraw for personal use easily with Debitoor bookkeeping software.

4. In its simplest form, your balance sheet can be divided into two categories: assets and liabilities. Assets are the items your company owns that can provide future economic benefit. Liabilities are what you owe other parties. In short, assets put money in your pocket, and liabilities take money out!

5. A term used in accounting, 'creditor' refers to the party that has delivered a product, service or loan, and is owed money by one or more debtors. A debtor is the opposite of a creditor – it refers to the person or entity who owes money.

6.The monetary value of an asset decreases over time due to use, wear and tear or obsolescence. This decrease is measured as depreciation. Accounting estimates the decrease in value using the information regarding the useful life of the asset.

7.Bad debt is an expense that a business incurs once the repayment of credit previously extended to a customer is estimated to be uncollectible. Bad debt is a contingency that must be accounted for by all businesses who extend credit to customers, as there is always a risk that payment will not be received.

8.Fictitious asset is not a real asset but deferred expenses that are shown in assets in the balance sheet. ... Expenses or losses that are not written off during the accounting period of occurrence because they give long-term benefit over a period of time are categorized as fictitious assets.

9.Real Assets is an investment asset class that covers investments in physical assets such as real estate, energy, and infrastructure. Real assets have an inherent physical worth. Real assets differ from financial assets in that financial assets get their value from a contractual right and are typically intangible.