Explain the Following accounting terms: (4)
(a) Expenses, (b)Gain, (c)Debtors, (d) Drawings.
Answers
Answer:
Expenses− Expenses are those costs that are incurred to maintain the profitability of business, like rent, wages, depreciation, interest, salaries, etc. These help in the production, business operations and generating revenues.
Gains− Gains are incidental to the business. They arise from irregular activities or non-recurring transactions; for example, profit on sale of fixed assets, appreciation in value of asset, profit on sale of investment, etc.
A debtor - or debitor is a legal entity that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this debt arrangement is a bank, the debtor is more often referred to as a borrower
drawing - in accounts is the record kept by a business owner or accountant that shows how much money has been withdrawn by business owners. These are withdrawals made for personal use rather than company use – although they're treated slightly differently to employee wages.