BASIC Accounting Terminologies

1) TRANSACTION :

An activity which involves exchange or transfer of goods or services or fund between two persons

EXAMPLE : purchase of goods , sales of goods

Transactions classified into two  :

1) Cash transaction :

Transaction where there is an immediate payment of money for the purchase of an asset

EXAMPLE :

Madhu buys table worth of Rs 15,000 and immediately pay the price of the table is known as cash transaction

2) Credit transaction :

Transaction where the payment is made on the future days is known as credit transaction

EXAMPLE :

Kamalesh purchase furniture worth of Rs 50,000 for his business purposes but he pay the cash on later days is known as credit transaction

2) PROPRIETOR :

A person who owns a business is called proprietor. He contributes money to the business with the intension of earning profit

3) CAPITAL :

It is the money invested by the proprietor in the business

EXAMPLE :

Mr. Sankar starts business with Rs 10,00,000.

Mr. Sankar – PROPRIETOR Rs 10,00,000 – CAPITAL

4) ASSET :

An asset is any resource that a business owns or controls

Assets classified into two :

– TANGIBLE ASSETS.

The assets are those have physical existence . Ex : land , vehicle

– INTANGIBLE ASSETS :

Those assets which doesn’t have physical existence but their possession give benefits to the owner . Ex: goodwill, trademarks

5) LIABILITIES :

Liabilities denotes the money which the proprietor has to pay for other institutions or person . Ex : loans from bank , bills payable.

QUESTION 🕜⌛:

1) what is asset ? What are the different types of assets ?

2) who is proprietor ?

3) what do you mean by credit transaction ?

4) what is mean by liabilities ?

RESULTS :

• 4/4 – Excellent 🌟🌟🌟🌟🌟
• 3/4 – very Good🌟🌟🌟🌟
• 2/4 – good 🌟🌟🌟
• 1/4 – Need to improve 👍 . You can 🤝 try again.

AUTHOR ✍️ :

CIN . Madhushree Sankar