Financial Accounting Terminology

4. Drawing

5. Business Transactions

6. Accounts

1. Asset – Plant and Machine A/c, Building A/c, Land A/c, Debtors A/c, Cash A/c.
2. Individual – Mr Sarb A/c, Mr Pawan A/c, Mr Balijit A/c, Mr Abhi A/c, Mrs Jasmeet A/c.
3. Organization – A&B Pvt. Ltd. A/c, HDFC Bank A/c, HAPPSS Store A/c, Jagdarshan A/c
4. Expense – Salary A/c, Wages A/c, Freight A/c, Commission A/c, Rent A/c,
5. Income – Rent Received A/c, Commission Received,

7. Debit

8. Credit

9. Goods

1. A car painter buys wood to make furniture or Fixture.
2. A Shop-Keeper buy products to sell it out to consumer (End User)

10. Purchase

11. Sale

12. Purchase Return / Return outwards

13. Sale Return / Return Inwards

14. Assets

15. Liabilities

16. Stocks/Inventories

17. Trade Receivables

18. Trade Payables

19. Cost of Goods Sold (COGS)

1. In Manufacturing: -

1. In trading: -  

20. Expenditure

1. Revenue Expenditure

It is the amount which already spent or due but not spent (Liability) on goods and services which are consumed within the current period. (It Means 1 Financial Year i.e. 01/04/__ to 31/03/__ ).

Like: - Paid Salary/Wages to Employer in C/Y, Rent of Office for C/Y, Commission on Sale For C/Y, all expenses have come under this.

2. Capital Expenditure

It is the amount which already spent or due but not spent (Liability) on goods and services which are/will be used and gets benefit from it in the current year and in future years also.

Like: - Spent to purchase a new Land and Building. Purchase and Creation of All assets and Come under this.

21. Expenses

22. Incomes

23. Revenues

24. Profit

1. Gross Profit

When there is an excess of direct incomes over direct expenses is known as gross profit.

2. Net Profit

When there is an excess of Total incomes over total expenses is known as Net profit.

25. Loss

1. Gross Loss

When there is an excess of Direct expenses over Direct incomes is known as Gross loss.

2. Net Loss

When there is the excess of total expenses over total incomes is known as a nett loss.

26. Gain

27. Discount

1. Trade Discount

Discount giving or getting at the time of sale or purchase is called a trade discount. This will not be shown in books.

2. Cash Discount

Discount giving or getting at the time of payment is called a cash discount. This will be shown in books.