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ACCOUNTING
TERMS
accounting principles

   The standards, rules, guidelines, and industry-
    specific requirements for financial reporting.
generally accepted accounting
principles (GAAP)
   The general guidelines and principles,
    standards and detailed rules, plus industry
    practices that exist for financial reporting.
    Often referred to by its acronym GAAP
Entity
   An economic unit that performs economic
    activities (Eg. Reliance Industries, Raymonds)


                        Event
Happening to       an   entity   (Eg   Recruitment   of
 employees)


                   Transaction
Is an exchange in which each participant receives or
   sacrifices value
Assets
   Any thing of use in future operations &
    belonging to organization.
                     Revenue
Monetary value of goods & services sold


                 Expenses/Cost
Expenses incurred to earn revenue
Loss
   It can be explained in two different meanings

             When expenses > Revenue

                       &

        Those affords that fails to earn revenue
Owner
   Person who invest his money & bears the risk
    of the business

                  Drawings
Money or value of goods belonging to business
 used by owner for his personal use
Goods
   All commodities which are purchased for
    selling in the usual course of business
              Sundry Debtors
From whom amounts are due for goods sold or
  services rendered
             Sundry Creditors
Amount owed by the enterprise on account of
 goods purchased or services rendered
accounts receivable

   A current asset resulting from selling goods or
    services on credit (on account).


                   Accounts Payable
A current liability resulting from purchase of
  goods or services on credit
bad debts expense

   This is an operating expense resulting from
    making sales on credit and not collecting the
    customers' entire accounts receivable
    balances
balance sheet

   One of the main financial statements. The
    balance sheet reports the assets, liabilities.
    Also referred to as the Statement of Financial
    Position.
wages

   The compensation earned by employees who
    are paid on an hourly basis. It is common for
    production workers to earn wages, since they
    are usually paid via an hourly rate
salary

   The compensation usually associated with
    executives, managers, professionals, office
    employees, etc. whose pay is stated on an
    annual or on a monthly basis. (On the other
    hand, "wages" is usually associated with
    employees whose pay is stated on an hourly
    basis.)

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5 accounting terms

  • 2. accounting principles  The standards, rules, guidelines, and industry- specific requirements for financial reporting.
  • 3. generally accepted accounting principles (GAAP)  The general guidelines and principles, standards and detailed rules, plus industry practices that exist for financial reporting. Often referred to by its acronym GAAP
  • 4. Entity  An economic unit that performs economic activities (Eg. Reliance Industries, Raymonds) Event Happening to an entity (Eg Recruitment of employees) Transaction Is an exchange in which each participant receives or sacrifices value
  • 5. Assets  Any thing of use in future operations & belonging to organization. Revenue Monetary value of goods & services sold Expenses/Cost Expenses incurred to earn revenue
  • 6. Loss  It can be explained in two different meanings When expenses > Revenue & Those affords that fails to earn revenue
  • 7. Owner  Person who invest his money & bears the risk of the business Drawings Money or value of goods belonging to business used by owner for his personal use
  • 8. Goods  All commodities which are purchased for selling in the usual course of business Sundry Debtors From whom amounts are due for goods sold or services rendered Sundry Creditors Amount owed by the enterprise on account of goods purchased or services rendered
  • 9. accounts receivable  A current asset resulting from selling goods or services on credit (on account). Accounts Payable A current liability resulting from purchase of goods or services on credit
  • 10. bad debts expense  This is an operating expense resulting from making sales on credit and not collecting the customers' entire accounts receivable balances
  • 11. balance sheet  One of the main financial statements. The balance sheet reports the assets, liabilities. Also referred to as the Statement of Financial Position.
  • 12. wages  The compensation earned by employees who are paid on an hourly basis. It is common for production workers to earn wages, since they are usually paid via an hourly rate
  • 13. salary  The compensation usually associated with executives, managers, professionals, office employees, etc. whose pay is stated on an annual or on a monthly basis. (On the other hand, "wages" is usually associated with employees whose pay is stated on an hourly basis.)