The terminology of Financial Accounting means that terms are used by the accountant to communicate the financial position of the business to the owner of the business.
What are the Terminologies of Financial accounting?
Financial accounting is known as business language, So it has its own terminology for everything used in the business. So, Every commerce student or professional should know the terminology of financial accounting, because it makes it easy to understand accounting. Without the study of the basic terminologies, you cannot make good at financial accounting because these are the basics of financial accounting like the English language, the alphabets are the basic which you have to know about if you want to learn English. without learning alphabets you can’t learn English. Same way without knowing basic terminologies you can’t record a single business financial transaction in the accounting books of the business.
The Categories of Terminologies of Financial accounting: –
These terminologies are categories on the basis of the financial statement of the business. We have divided these terminologies into three categories. The first category we had made on the basis of the balance sheet which is prepared at the end of each financial year. In India, from the financial year, it starts from 1st April and ends on 31st March. The second category has made on the basis of the income statement or profit and loss account which are also prepared at the end of the financial year. At last, we have made other terminologies that cover all other terminologies which are not cover under both above-said categories. These all are shown as below:
1. Balance Sheet terms:
Balance Sheet terms mean those terms which are used while preparing the balance sheet of the business. These are the most important Terminologies. These are shown below and these all terms are explained in a separate article.
2. Income Statement or Profit and loss account terms:
Income Statement or Profit and loss account terms means those terms which are used while preparing the Income statement of the business. These are shown below and these all terms are explained in a separate article.
3. Other accounting terms:
These are also important Terminologies of financial accounting. These are shown below and these all terms are explained in a separate article.
Check out all these terminologies in Hindi by click here.