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Accounting Terminology: By: Dr. Deepika Saxena Associate Professor, JIMS
Accounting Terminology: By: Dr. Deepika Saxena Associate Professor, JIMS
Terminology
By: Dr. Deepika Saxena
Associate Professor , JIMS
Accounting Terminology
1. CAPITAL:
It means the amount (in terms of money
or assets having money value) which the
proprietor has invested in the firm. For
the firm, capital is liability towards the
owner.
2. LIABILITY: Liability means the amount which
the firm owes to outsiders, (except the
proprietor). The claims of those who are not
owners are called Liability.
Liabilities = Assets – Capital
Long term Liability: those liabilities which are
payable after a long term, e.g., long term
loans, debentures.
Current Liability: those liabilities which are
payable in near future (generally within one
year). E.g. creditors, bank overdraft, bill
payable, short-term loans, etc.
3. ASSET:
Anything which enables a firm to get cash or
a benefit in future, is an asset.
11. RECEIVABLES:
Receivables may be in the form of bills receivables or
any other form except in the form of debtors.
The amount due to business entity from outsiders
which are not included in debtors are covered under
this head.
e.g. bills of exchange, amount receivables on account
of subsidy etc.
12. CREDITORS:
A person to whom money is owing by the firm is
called a creditor.
13. PAYABLES:
Payables may be in the form of bills payable or any
other form except in the form of creditors.
The amount to be paid to outsiders by business
entity except sundry creditors are covered under
this head.
e.g. bills of exchange, expenses payable.
14. DRAWING:
It is the amount of money or the value of
goods which the proprietor takes for his
domestic or personal use.
15. Discount:
An allowance or deduction allowed from an amount due is
termed as Discount.