Accounting and Basic terminologies of accounting

Brief introduction about accounting terminologies

1. Introduction to ACCOUNTING Process of recording, summarising and reporting financial transactions of a business or individual.

2. Terminologies of accounting Assets Expenses Capital Revenue Liabilities Debtors Creditors Bed debt Drawings Outstanding expenses Accrued income Insolvent

3. Assets Assets are resources owned by an organ on or individual that have economic value and can provide future benefits. These can be used to generate revenue, support operations. EXAMPLE OF THE ASSESTS Vehicles Machinery Furniture Stocks Bonds Savings account

4. Expenses In accounting, “expenses” refer to the costs incurred in the process of earning revenue. They are the expenditures that a business or individual makes to operate, produce goods or services, and generate income. EXAMPLE OF EXPENSES Interest Operating Expenses Wages

5. Capital Capital is the resources that owners invest in a business to start or grow it. It represents the financial foundation of the business. EXAMPLE OF CAPITAL Cash investment Equipment Property Shares

6. Revenue Revenue is the total income a business earns from selling its goods or services before any expenses are deducted. EXAMPLE OF REVENUE Product sales Service income Interest income Rental income Subscription fees

7. Liabilities Liabilities is a kind of financial obligation that a business has to pay at the end of an accounting period to a person or a business. EXAMPLE OF LIABILITIES Salary payable Bank loan Taxes payable Unearned Revenue