Question

$\huge\bold\red{Define}$

✒Asset
✒Liability
✒Capital
✒Debtor
✒Creditor
✒Drawing

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Answer 1

Answer:

Asset;

A useful or valuable thing or person.

Liability;

The state of being legally responsible for something.

Capital;

Capital generally refers to financial wealth, especially that used to start or maintain a business.

Debtor;

A person, country, or organization that owes money.

Creditor;

A person or company to whom money is owing.

Drawing;

A picture or diagram made with a pencil, pen, or crayon rather than paint.

Answer 2

assets: assets are the properties of every description belonging to the business . cash in hand, plant and machinery ,furniture and Fittings, bank balance, debitor, bills receivable stock of goods, investments ,Goodwill are some examples of assets. assets can be classified into tangible and intangible .

tangible assets: these are the assets having physical existence which can be seen and touched for example plant and machinery ,cash etc.

intangible assets: these are the assets having no physical existence but their position give rise to some rights and benefits to the owner. it cannot be seen and touched .Goodwill patents trademarks are some of the examples .

liabilities : refers to the financial obligations of a business. this denote the amount which business owes to others .examples loan from banks or other persons ,creditors for goods supplied ,bills payable ,outstanding expenses bank overdraft etc.,

drawings: it is the amount of cash or value of goods withdrawn from the business by the proprietor for his personal use. it is deducted from the capital .

capital : it is the amount invested in the business . this amount is increased by the amount of profits earned and the amount of additional capital introduced . it is decreased by the amount of loss incurred and the amount withdrawn .

debtors: a person( individual or firm ) who receives a benefit without giving money or money worth immediately but liable to pay in future or in due course of time is a debtor. the debtors are shown as an asset in the balance sheet .

creditors : a person who gives a benefit without receiving money or Mani worth immediately but claim in future , is a creditor. the creditors are shown as a liability in the balance sheet .