Hello all this blog continuation of previous basic of a accounts blog..

Now I'm going to tell about accounting terminology. It's an some basic accounting terms which are routinely used in the business world. The following are some important terms which enable a student to comprehend accounting in better way.

1.Capital. :

  It represents the funds of owner invested in a business. It may be the original amount invested by the owner or original contribution adjusted for profits and drawings.it is also known as equity or net worth.

2.liability :

  It represents temporary interest of outside creditors in the assests of business. Liability are debts they are amounts owed to creditors that the claims of who are not owners are called liabilities.

3.Assets:

  Assets are defined as anything of value owned by a business.accordind to finny and miller.assets are future economic benefits the rights which are owned or controlled by an organisation or individual.

4: Revenue:

   It is defined in inflow of assets which results in an increase in the owners equity.it includes all incomes like sales ,receipts,  interest, commission,brokerage etc.however,receipts of capital nature like additional capital,sale of assets etc are not part of revenue.

5.Expense:

   It is any amount spent in order to produce and sell the goods and services which bring in the revenue expense may be defined as the cost of the use of things or services for the purpose of generating revenue.expense can be capital and revenue expense.

6.Debtors:

A person who receives a benefit without giving money or money's worth immediately bit liable to pay in future is a debtor.Debtor can be trade debtor if he buys the good on credit,others are non trade debtors.

7.Creditors:

  A person who gives a benefit without receiving money or money's worth immediately but,liable to claim in future is a creditor.creditor can be Trade creditors if he supplies goods on credit other are non trade creditors.

8.Tangible assets:

  Assets which have physical existence they can be seen or felt or touched,are termed as tangible assets eg: cash, machinery and buildings.

9.Intangible assets:

  Assets which have no physical existence they cannot be seen or felt or touched,are termed as intangible assets.eg,good will,patent rights, copy rights.

10.Fictitious assets:

    Items shown along with other assets on the assets side of balance sheet,but actually representing unadjusted losses are termed as fictitious assets.eg preliminary expenses profit and loss account debit balance etc.

This are all some accounting terminology…