Giving examples, explain each of the following:-
a) Capital
b) Liability
c) Purchase
d) Sales
e) Debtor
f) Creditor
g) Drawings
h) Discount
i) Stock
Answers
Answer:
Fixed Assets-Fixed assets are those which lasts for a long period of time such as plant and machinery, building,land etc.
Gain-A profit 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.
Profit- The excess of revenues of a period over its related expenses during an accounting year is termed as profit.Profit increases the investment of the owners.
Revenue-These are the amounts of the business earned by selling its products or providing services to customers,such as commission,interest,dividends,royalties, rent received etc.
Expenses-Coasts incurred by a business in the process of earning revenue are known as expenses.Such as rent, wages,salaries,interest,cost of heater,light and water,telephone etc.
Short Term Liability-Short term liabilities are obligations that are payable within a period of one year,i.e.creditors,bills payable,bank overdraft.
Capital-Amount invested by the owner in the firm is known as capital.It may be brought in the form of cash or assets by the owner for the business.
answer
Giving examples, explain each of the following:-
a) Capital
b) Liability
c) Purchase
d) Sales
e) Debtor
f) Creditor
g) Drawings
h) Discount
i) Stock