terminology m.a
TRANSCRIPT
-
8/2/2019 Terminology M.a.
1/32
EntryEntry
____________________________
means record ameans record a
transaction in book oftransaction in book of
account. In accountaccount. In accountevery entry has twoevery entry has two
effects, one debiteffects, one debit
effect and other crediteffect and other credit
effect.effect.
-
8/2/2019 Terminology M.a.
2/32
TransactionTransaction
__________ is an exchange of__________ is an exchange of
goods, services, and cashgoods, services, and cash
between persons. There arebetween persons. There are
two types of transactions,two types of transactions,
economical (financial) & non-economical (financial) & non-
economical (non-financial).economical (non-financial).
Only economical transactionsOnly economical transactions
are recorded in books ofare recorded in books of
account.account.
-
8/2/2019 Terminology M.a.
3/32
VoucherVoucher
Document whichDocument which
support the businesssupport the business
transaction, whichtransaction, which
has been entered inhas been entered inthe book of account.the book of account.
BillsBills
InvoiceInvoice
-
8/2/2019 Terminology M.a.
4/32
DebitDebit
_________ means_________ means
receivable or thingreceivable or thing
owned.owned.
Suggest the benefit isSuggest the benefit isreceived.received.
Receiver of benefit isReceiver of benefit is
debited.debited.
Paid Telephone BillPaid Telephone Bill
Rs. 1000.Rs. 1000.
Purchased Plant &Purchased Plant &
Machinery worth Rs.Machinery worth Rs.1,00,000.1,00,000.
ABC ltd. buys theABC ltd. buys the
good on credit fromgood on credit from
XYZ ltd., worth Rs.XYZ ltd., worth Rs.
1000010000
-
8/2/2019 Terminology M.a.
5/32
CreditCredit
_________ means_________ means
give.give.
Suggests that theSuggests that the
account has given theaccount has given thebenefit.benefit.
An account whichAn account which
give the benefit isgive the benefit is
credited.credited.
Received Interest &Received Interest &
Dividend.Dividend.
Capital of theCapital of the
business.business.ABC ltd. buys theABC ltd. buys the
good on credit fromgood on credit from
XYZ ltd., worth Rs.XYZ ltd., worth Rs.
1000010000
-
8/2/2019 Terminology M.a.
6/32
JournalJournal
A book in whichA book in which
double entry isdouble entry is
made. A transactionmade. A transaction
when takes place,when takes place,immediately enteredimmediately entered
in this book.in this book.
-
8/2/2019 Terminology M.a.
7/32
Subsidiary bookSubsidiary book
Separate journals areSeparate journals are
kept for particularkept for particular
types of thetypes of the
transaction, which istransaction, which iscalled as Subsidiarycalled as Subsidiary
book. E.g., purchasebook. E.g., purchase
book, cash book, etc.book, cash book, etc.
-
8/2/2019 Terminology M.a.
8/32
AccountAccount
__________ is a__________ is a
summarized record of thesummarized record of the
transaction at one placetransaction at one place
relating to one person,relating to one person,
one kind of property orone kind of property orone class of expenses orone class of expenses or
incomes.incomes.
-
8/2/2019 Terminology M.a.
9/32
LedgerLedger
It is a main book ofIt is a main book of
account. In thisaccount. In this
book all accountsbook all accountsare preparedare prepared
separately.separately.
-
8/2/2019 Terminology M.a.
10/32
BalanceBalance
Difference betweenDifference between
the total of debit sidethe total of debit side
and credit side of anand credit side of an
account opened in aaccount opened in aledger for a specifiedledger for a specified
period is calledperiod is called
____________________
-
8/2/2019 Terminology M.a.
11/32
GoodsGoods
__________ are__________ are
those productsthose products
which arewhich arebought/produced bybought/produced by
businessman forbusinessman for
resale to makeresale to make
profit.profit.
-
8/2/2019 Terminology M.a.
12/32
StockStock
_________ is the_________ is the
balance of goodsbalance of goods
which remainswhich remains
unsold.unsold.
-
8/2/2019 Terminology M.a.
13/32
DebtorDebtor
Person who owesPerson who owes
debt to business.debt to business.
Which means fromWhich means from
whom we have towhom we have totake money.take money.
If goods are sold to aIf goods are sold to a
person on credit, thenperson on credit, then
the person is a debtorthe person is a debtor
for us.for us.
ABC ltd. buys theABC ltd. buys the
good on credit fromgood on credit from
XYZ ltd., worth Rs.XYZ ltd., worth Rs.
1000010000
-
8/2/2019 Terminology M.a.
14/32
CreditorCreditor
________ is a person________ is a person
to whom debt is owedto whom debt is owed
by business.by business.
__________ is a__________ is aperson to whom weperson to whom we
have to pay money.have to pay money.
ABC ltd. buys theABC ltd. buys the
good on credit fromgood on credit from
XYZ ltd., worth Rs.XYZ ltd., worth Rs.
1000010000
-
8/2/2019 Terminology M.a.
15/32
LiabilityLiability
They are the debtThey are the debtwhich a businesswhich a businessowns to others.owns to others.
The amount payableThe amount payableby business for goodsby business for goodspurchased or for loanpurchased or for loantaken for servicestaken for servicesrendered to therendered to thebusiness.business.
DebentureDebenture
ProvisionsProvisions
Unsecured LoansUnsecured Loans
Current *********Current *********
ContingenciesContingencies
Liabilities = Assets - Capital
-
8/2/2019 Terminology M.a.
16/32
AssetsAssets
__________ are all__________ are all
those things or rightsthose things or rights
which are owedwhich are owed
business and havebusiness and havemonetary value.monetary value.
These are propertiesThese are properties
which help to run thewhich help to run the
business.business.
Fixed AssetsFixed Assets
InvestmentsInvestments
Current AssetsCurrent Assets
Advances & LoansAdvances & Loans
MiscellaneousMiscellaneous
Expenditure.Expenditure.
-
8/2/2019 Terminology M.a.
17/32
Fixed assetsFixed assets
_________ are those_________ are those
which are notwhich are not
purchased for resale,purchased for resale,
which help running ofwhich help running ofthe business andthe business and
whose benefit iswhose benefit is
available for a longavailable for a long
time.time.
P&MP&M
LandLand
GoodwillGoodwill
PatentPatent
copyrightcopyright
-
8/2/2019 Terminology M.a.
18/32
Current assetsCurrent assets
__________ are__________ are
those assets whichthose assets which
are constantlyare constantly
converted into cashconverted into cash Other assets whoseOther assets whose
values go onvalues go on
changing every daychanging every day
DebtorDebtor
StockStock
CashCash
Bank BalanceBank Balance
Bills ReceivableBills Receivable
-
8/2/2019 Terminology M.a.
19/32
Tangible assetsTangible assets
__________ assets__________ assets
have a physicalhave a physical
existence.existence.
Which can see andWhich can see andtouch.touch.
P&MP&M
LandLand
Furniture & FixturesFurniture & Fixtures
-
8/2/2019 Terminology M.a.
20/32
Intangible assetsIntangible assets
____________ not____________ not
physical existence butphysical existence but
it has a monetaryit has a monetary
value.value.
GoodwillGoodwill
PatentPatent
CopyrightCopyright
TrademarkTrademark
-
8/2/2019 Terminology M.a.
21/32
CapitalCapital
Amount invested byAmount invested by
the proprietor in athe proprietor in a
business isbusiness is
called_________called_________
Dhirubhai started hisDhirubhai started his
business with Rs.business with Rs.
5000.5000.
-
8/2/2019 Terminology M.a.
22/32
DrawingDrawing
Value of cash orValue of cash or
goods or any othergoods or any other
assets withdraw fromassets withdraw from
business by abusiness by aproprietor for hisproprietor for his
personal or domesticpersonal or domestic
use.use.
Mr. Patel submits Rs.Mr. Patel submits Rs.
1,00,000 as donation1,00,000 as donation
for getting admissionfor getting admission
of his son in VTCBB.of his son in VTCBB.
-
8/2/2019 Terminology M.a.
23/32
SolventSolvent
A person is saidA person is said
________ when his________ when his
assets are more thanassets are more than
his liabilityhis liability
Assets > LiabilityAssets > Liability
-
8/2/2019 Terminology M.a.
24/32
InsolventInsolvent
A person is saidA person is said
________ when his________ when his
assets are less thanassets are less than
his liabilityhis liability
Assets < LiabilityAssets < Liability
-
8/2/2019 Terminology M.a.
25/32
ExpenseExpense
________ is the________ is the
money spend formoney spend for
conducting aconducting a
business.business.
Telephone billTelephone bill
Electricity billElectricity bill
SalarySalary
WagesWages
DepreciationDepreciation
-
8/2/2019 Terminology M.a.
26/32
Revenue ExpenseRevenue Expense
_________ expense_________ expense
incurred for day toincurred for day to
day.day.
Eg. SalaryEg. Salary RentRent
Insurance premiumInsurance premium
-
8/2/2019 Terminology M.a.
27/32
Capital expensesCapital expenses
_________ expense_________ expense
result into acquisitionresult into acquisition
of assets.of assets.
LandLand
P&MP&M
FurnitureFurniture
Preliminary ExpensesPreliminary Expenses
-
8/2/2019 Terminology M.a.
28/32
Bad DebtsBad Debts
If out of the amountIf out of the amount
receivable, somereceivable, some
amount is notamount is not
received, from debtorreceived, from debtorthen it is loss of thethen it is loss of the
business.business.
ABC ltd. Who boughtABC ltd. Who bought
goods on credit worthgoods on credit worth
Rs. 10,000, has beenRs. 10,000, has been
declared insolventdeclared insolventand there are noand there are no
scope to receivescope to receive
those money back.those money back.
-
8/2/2019 Terminology M.a.
29/32
DiscountDiscount
If the businessmanIf the businessman
agree to receiveagree to receive
some amount lesssome amount less
than the printed pricethan the printed priceof the amount show inof the amount show in
the invoice, thethe invoice, the
difference is calleddifference is called
__________________
On cash purchase ofOn cash purchase of
goods worth Rs.1000,goods worth Rs.1000,
the seller chargedthe seller charged
only Rs. 950 only.only Rs. 950 only.
-
8/2/2019 Terminology M.a.
30/32
Gross profitGross profit
When the sales areWhen the sales are
more than themore than the
purchase price of thepurchase price of the
goods plus purchasegoods plus purchaseexpense, thenexpense, then
difference is thedifference is the
__________________
Trading AccountTrading Account
Sales Cost of SalesSales Cost of Sales
-
8/2/2019 Terminology M.a.
31/32
Net profitNet profit
_______ is a surplus_______ is a surplus
left after deducting allleft after deducting all
expenses from grossexpenses from gross
profit and addingprofit and addingother incomes to itother incomes to it
Profit & Loss AccountProfit & Loss Account
-
8/2/2019 Terminology M.a.
32/32