Accounting Terms

SUPERIOR UNIVERSITY

Accounting Terms MBA Professional (Evening) Session 2007-09

KHALID AZEEM

8257

Financial Accounting:It is an art of recording, classifying, analyzing & interpreting the results of economic operations/activities for a particular period.

Accounting terms:1) Account:

Some money are collected to make account is called account. For example: currency. 2) Asset:

Anything or service having value in term of money, with the authority to use. 

CASH

 MERCHANDISE  FURNITURE  FIXTURES  MACHINERY  BUILDINGS  LAND  ACCOUNTS RECEIVABLE

For example: computer. 3)

Liabilities:

Liabilities the present amount owned by a business on a third party is called liabilities.  ACCOUNTS PAYABLE  NOTES PAYABLE

For example: purchases goods on credit. 4)

Depreciation:

Due to wear and tear of long term acid the monetary value of that acid will decrease is called depreciation. For example: the car price is 1, 00000 but after ten year the car price

is decrease. 5)

Capital:

Initial investment in goods or in cash in any business by the owner is called capital. For example: furniture, building, etc 6) Income: After excluding all expanses from revenue is called income. For example, revenue, expenses must be excluding. 7) Revenue: The concentration received from sales of good and services is called revenue.  Delivery Fees  Consulting Fees  Rent Revenue (if business rents space to others  Interest Revenue (for interest earned on bank deposits)  Sales (for sales of merchandise)

For example: credit card 8) Expenses: The charge that gives you short term benefit is called expenses. For example: credit cards.  Rent  Salaries  Supplies Consumed  Taxes

9) Debtors: That thing that is soled from rent is called debtors. For example, 10) Creditors: Some thing that is on this on the credit is called creditors. 11) Accounts payable: Account of money you owe. A liability that is usually created when has made a purchase on credit 12) Accounting receivable: Account of money owed to you for the sale of good or services.

13) Gross profit: The amount of net sales minus the amount of cost of prices. 14) Gross loss: The amount of net sales adds the amount of cost of prices. 15) Net profit: The profit of the sale is called net profit. 16) Net loss: The whole sale loss is called net loss. 17) Purchases: Buying goods from the market is called purchases. 18) Purchases returns: Buying returns from the market is called purchases returns. 19) Sales: Selling goods in the market is called sales. 20) Sales return: Selling goods in the market is return from the market is called sales return. 21) Discount: Concession from the selling goods is called discount. 22) Commission: Selling goods in the in the form of commission is called commission.

23) Raw material: Some raw material buying from the market is called raw material. 24) Work in process: The raw material are work in process is called work in process. 25) Finished good: All the process has been done to make a product is called finished goods. 26) Salaries: The money have been given from the employee is called salaries.

27) Wages: The daily basis money given to the employee is called wages. 28) Shares: Specific money portion of the company of the company are hold a person is called the share. 29) Debentures: MISSING 30) Accrued income: Income earned during an accounting period but not the receive/recorded by the end of the period. For example: 30) Accrued expenses: A liability incurred during the accounting period for which payment has not been done. 31) Prepaid expanses: Amounts that are paid in advance for product is not used up during the accounting period. 32) Inventories: Desire for more and more is called inventories. For example: lands, cars, homes, etc. 33) Trading: Buying and selling of goods from one place to another is called trading. For example: toys, garments, etc. 34) Advance income: That income that is paid before the work or any activity is called advance income. For example: 35) Manufacturing: The process of making goods is called manufacturing. For example: 36) Retained in come: This is the portion of earnings (usually the majority), which is not paid out in dividends. For example: 37) Income statement: A statement that summarizes revenues and expenses.

For example: single person income sheet. 38) Balance sheet: A statement listing the total assets and liabilities; indicating the net worth of the company for the given time period. For example: company balance sheet. 39) Owners equity statement: The owners' right to the assets of an entity. For example: company owner statement. 40) Cash flow statement: The pattern of income and expenditures, as of a company or person, and the resulting availability of cash. For example 41) Drawing: When a businessman draw amount from the business for personal use is called drawing. For example: a shopkeeper drew some amount