THE DEFINATION IS GIVEN BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANT (AICPA). ACCOUNTING IS AN ART OF RECORDING, CLASSIFIED AND SUMMERING IN A SIGNIFICANT MEMBER AND IN TURNS OF MONEY, TRANSACTION, AND EVENT WHICH HAVE A RESULT. By referring the video you will definitely know the terms and concepts used in accounts and definitely, you will score much as possible.

1. ACCOUNTING AND ITS
TERMINOLOGY Dd

2. INTRODUCTION
• THE DEFINATION IS GIVEN BY THE AMERICAN INSTITUTE OF CERTIFIED
PUBLIC ACCOUNTANT (AICPA).
• ACCOUNTING IS AN ART OF RECORDING, CLASSIFIED AND SUMMERISNG IN
A SIGNIFICANT MEMBER AND IN TURNS OF MONEY, TRANSCATION AND
EVENT WHICH HAVE A RESULT.

3. CHARACTERISTIC OF ACCOUNTING
• FINANCIAL
• MONEY HAS MEDIUM OF EXCHANGE
• CLASSIFICATION AND ANALYSIS OF TRANSCATION
• INTERPRETATION OF TRANSCATION
• QUANTITATIVE INFORMATION
• ECONOMICS DECISION
• HISTORICAL INFORMATION

4. OBJECTIVE OF ACCOUNTING
• TO KNOW THE EFFECT OF TRANSCATION
• PERMANENT RECORD
• TO KNOW THE INFLUENTIAL FACTORS
• TO DETERMINE TAX AVAILIBILITY
• TO KNOW QUANTUM OF PAYABLE
• TO KNOW QUANTUM OF RECEIVABLE
• TO MEASURE PROFIT
• TO DETECT AND AVOID ERRORS AND FRAUDS

5. ACCOUNTING
ADVANTAGE DISADVANTAGE
AVAILIBILTY OF INFORMATION
TO KNOW PROFIT
TO KNOW FINANCIAL STATUS
TAX PLANNING
VALUATION OF BUSINESS
DECISION MAKING
AS AN EVIDANCE
COMPARISON WITH PAST RECORDS
MORAL CONTROL
CORRECTIVE MEASURES
NON-FINANCIAL
STABLE VALUE OF MONEY
HISTORICAL TRANSCATION AND EVENTS
AVOIDNESS OF MARKET PLACE
USE OF ESTIMATES
DUAL STANDARD

6. TERMINOLOGY
• BUSINESS TRANSCATION-THE EXCHANGE OF PRODUCT OR SERVICE BETWEEN
TWO OR MORE THAN TWO PERSON IN BUSINESS FOR CASH OR CREDIT.
• CAPITAL-AN INVESTMENT MADE BY THE OWNER TO CONSUMER THE
BUSINESS IS KNOWN AS CAPITAL.IT CAN BE MADE IN CASH OR ASSET FORM.
• DRAWING-WHEN OWNER OF BUSINESS WITHDRAW CASH OR ANY ASSET FOR
PERSONAL PURPOSE IS DRAWING.IT RESULT IN REDUCTION TO CAPITAL.
• ASSETS-ANY TANGIBALE OR INTANGIBLE PRODUCT ON WHICH OWNERSHIP IS
OF BUSINESS AND HAS ECONOMIC VALUE.THE DURATION OF THAT THING
WILL BE LONG-TERM.
• VOUCHER-IT IS A WRITTEN DOCUMENT ON THE BASIS OF WHICH
TRANSCATION OF BUSINESS ARE RECORDED IN THE BOOKS OF ACCOUNTS.

7. ASSETS
NON CURRENT CURRENT FICTITIOUS
THEY ARE IDENTIFIED BY
TIME.THEY ARE AVAILABLE FOR
THE PERIOD OF MORE THAN
ONE YEAR.THEY ARE ALSO
CLASSIFIED AS TANGIBLE AND
INTANGIBLE ASSETS
THE ASSET WHOSE TIME
DURATION IS OF SHORT OR
LESS THAN ONE YEAR.
LIQUID ASSETS-ALL THE
CURRENT ASSET EXLUDING
STOCK.
REAL ASSETS-ALL THE ASSETS
EXLUDING STOCK ARE
RECOGNIZED AS LIQUID
ASSETS.
ASSETS WHICH DON’T HAVE
PHYSICAL FORM AND CANNOT
CONVERT INTO CASH AND DO
NOT HOLD ANY VALUE.THE
BENEFIT FOR THAT IS
AVAILABLE AFTER ONE YEAR.

8. LIABILITY
• AMOUT PAYABLE BY THE BUSINESS FOR CREDIT PURPOSE OF GOOD OR
AMOUT PAYABLE FOR BORROWED.SO, THE MONEY IS PAYABLE IN FUTURE.
CURRENT LIABILITY NON-CURRENT LIABILITY
A LIABILITY WHICH IS TO BE
PAID IN ONE YEAR BY THE
BUSINESS.
EXAMPLE-OUTSTANDING
SALARY
A LIABILITY WHICH IS PAID
DURING THE PERIOD OF MORE
THAN ONE YEAR BY THE
BUSINESS.
EXAMPLE-BANK LOAN

9. RECIPTS
• WHEN MONEY IS RECEIVED DUE TO BUSINESS CONSEQUENCES IT IS
CALLED RECEIPT.
CAPITAL RECIPT REVENUE RECIPT
THE RECIPT THAT IS NOT
RECEIVE REGULARLY AND
WHICH IS PROCURED FROM
THE SALE OF ASSET OR
DEBENTURE.
THE RECIPT WHICH WOULD
REMAIN CONSTANT AND
PROFIT IS EARNDURING THE
YEAR OR LOSS IS
INCURED.THESE RECIPTS RISE
FREQUENTLY.

10. PAYMENTS
• MONEY PAID DUE TO BUSINESS TRANSCATION ARE PAYMENTS.IT IS
KNOWN AS EXPENDITURE.
CAPITAL EXPENSE DEFERRED REVENUE
EXPENSE
REVENUE EXPENSE
THE PAYMENT WHICH
IS NOT REGULAR IN
NATURE.
THIS IS FICTIOUS
ASSET.BENEFIT OF
SUCH EXPENSE
AVAILABLE FOR A
LONGER PERIOD.
THE PAYMEN WHICH
REMAIN CONSTANT
DURING THE YEAR
AND USE IN
DETERMINATION OF
PROFIT-LOSS.

11. TERMINOLOGY
• PROFIT-AFTER DEDUCTION OF REVENUE EXPENSE FROM INCOME OF ONE
YEAR, THE REMAINING SURPLUS IS KNOWN AS PROFIT. THIS PROFIT IS
REVENUE PROFIT.IF IRREGULAR PROFIT OCCUR THAN IT IS CAPITAL
PROFIT.
• LOSS-THE DIFFERENCE OCCUR DUE TO REVENUE INCOME FROM
REVENUE EXPENSE IS LOSS.THE COMPETITION OF LOSS IS CONTRARY TO
PROFIT COMPETITION.
• GOODS-PRODUCT OR ITEM IN WHICH A BUSINESSMAN IS TRADING ARE
KNOWN AS GOODS.
• PURCHASE-A BUSINESS PURCHASE GOODS FOR THE BUSINESS,IT IS
TREATED AS PURCHASE IN ACCOUNTING.
• SALES-WHEN A BUSINESSMAN SELLS GOODS IN WHICH HE IS TRADING IS
KNOWN AS SALES.
• STOCK-GOODS PURCHASED BY BUSINESSMAN AND REMAIN UNSOLD ARE
THE STOCK OF BUSINESS.

12. DEBTORS AND CREDITORS
• WHEN A BUSINESSMAN SALES A GOOD TO HIS OWN USTOMERS, THOSE
CUSTOMERS KNOWN AS DEBTORS.THEY ARE TREATED AS CURRENT
ASSET.ANY AMOUNT RECEIVE BY BUSINESS FROM SUCH APERSON IS
RECEIVABLES.
• CREDITORS AND PAYABLE-A BUSINESSMAN WHEN PURCHASE GOODS ON
CREDIT FROM A PERSON, THAT PARTICULAR PERSON BECOME CREDITOR
OF BUSINESS.THEY ARE TREATED AS CURRENT LIABILITY.AMOUT TO BE
PAID IN FUTURE IS KNOWN AS PAYABLE.

13. DISCOUNT
• MANY ATIME FROM TOTAL AMOUNT OF PURCHASE OR SELL,CERTAIN
AMOUNT IS DEDUCTED AND ONLY REMAINING AMOUNT IS PAID.THE
AMOUNT WHICH IS DEDUCTED FROM TOTAL AMOUNT IS DISCOUNT.
TRADE DISCOUNT CASH DISCOUNT
AT THE TIME OF SALE, A
BUSINESSMANDEDUCT
CERTAIN AMOUNT OR % FROM
SALE PRICE.
THEY ARE NOT RECORDED IN
THE BOOKS OF ACCOUNTS.
TO ATTRACT THE CUSTOMER,
WITH PURPOSE TO RECEIVE
QUICK COLLECTION OF SALE,
THE AMOUNT DEDUCTED FORM
RECEIVABLE AMOUT.

14. METHODS OF PREPARING ACCOUNTS
• DESI NAMA SYSTEM-
IT IS AN ANCIENT METHOD OF WRITING ACCOUNT.GENERALLY, IT IS USED
BY SALE PROPARTEL AND PARTNERSHIP FIRM.ROJMAIL IS THE PRIMARY
BOOK OF THIS ACCOUNT.KHATAVAHI IS A SECONDARY BOOK.THIS METHOD
ALSO KNOWN AS BAHIKHATA SYSTEM.GRADUALLY, THIS SYSTEM OF USE
HAS REDUCE

15. DOUBLE ENTRY SYSTEM
• A MATHEMATICIAN OF ITALY, LUCA PACILIO CONSIDER THE FATHER OF
THIS SYSTEM.
BASES OF DOUBLE ENTRY SYSTEM
MERCANTILE BASE CASH BASE MIXED BASE
IN THIS WHEN ACCOUNTS ARE
PREPARED ALL TRANSCATION
OF THAT YEAR IS CONSIDER
RECIPTS OF THOSE
TRANSCATION.
UNDER THIS SYSTEM ONLY
CASH TRANSCATION OF THAT
RESPECTIVE ACCOUNTING
YEAR CONSIDER IN PREPARING
ACCOUNT.
THIS METHOD IS MODIFY
VERSION OF MERCANTILE
SYSTEM.IT IS THE MIXTURE OF
MERCANTILE AND CASH
SYSTEM.

16. TERMINOLOGY
• DEPRECIATION-EVERY YEAR THE VALUE OF FIXED ASSET REDUCE BY
CERTAIN AMOUNT.IT IS TREATED AS EXPENSE OF BUSINESS.IT IS KNOWN
AS NON-CASH EXPENSE.
• BAD DEBTS-WHEN GOODS ARE SOLD TO BUSINESSMAN ON CREDIT TO A
DEBTOR, MANY TIME THE DEBTOR MAY NOT ABLE TO PAY FULL AMOUNT
IN SUCH CASE THE BUSINESS INCURED A BAD DEBTS ACCOUNT.
• SOLVENT-A PERSON WHO PAYS FINANCIAL OBLIGATION REGULARLY AND
WHOSE ASSET ARE MORE THAN LIABILITY, THAT PERSON IS KNOWN AS
SOLVENT PERSON.
• INSOLVENT-A PERSON WHO IS NOT CAPABLE OF PAYING THE AMOUT TO
THE BUSINESS FROM WHICH HE LEND MONEY THAN SUCH PERSON WILL
BE INSOLVENT IF THE COURT ORDER.

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