INTRODUCTION

TO THE BASIC TERMS OF

ACCOUNTING

By :- MISHTHI
JAGGI
Roll No. :- 17
INVENTORY :
01-ASSETS
02-LIABILITES
03-DEBTORS
04-CREDITORS
05-CASH DISCOUNT
06-TRADE ACCOUNT
07-REVENUES
08-CAPITAL
09-DRAWINGS
10-BAD DEBTS
1. ASSETS :- AN ITEM OF PROPERTY OWNED BY A PERSON OR COMPANY ,
REGARDED AS HAVING VALUE AND AVAILABLE TO MEET DEBTS ,
COMMITMENTS OR LEGACIES . ‘ GROWTH IN NET ASSETS’

2. LIABIALITES :- A THING FOR WHICH SOMEONE IS RESPONSIBLE,

ESPECIALLY AN AMOUNT OF MONEY OWNED

3. DEBTORS :- A PERSON , COUNTRY OR ORGANIZATION THAT OWES

MONEY

4. CREDITOR :-A PERSON OR A COMPANY TO WHOME MONEY IS OWING

5. CASH DISCOUNT :- DEDUCTIONS ALLOWED BY SOME SELLERS OF

3

GOODS , OR BY SOME PROVIDERS OF SERVICE TO MOTIVATE CUSTOMERS

TO PAY THEIR BILLS WITHEN A SPECIFICE TIME . CASH DISCOUNT IS ALSO
CALLED EARLY PAYMENT DISCOUNT
6. TRADE DISCOUNT :- A DISCOUNT ON THE RETAIL PRICE OF SOMETHING ALLOWED
OR AGREED BETWEEN TRADERS OR TO A RETAILER BY A WHOLESALE

7. REVENUES :- INCOME GENERATED FROM NORMAL BUISNESS OPERATIONS AND

INCLUDES DISCOUNTS AND DEDUCTIONS FOR RETURNED MERCHANDISE . IT IS THE TOP
LINE OR GROSS INCOME FIGURES FROM WHICH COSTS ARE SUBTRACTED TO DETERMINE
NET INCOME. REVENUES IS ALSO KNOWN AS SALES ON THE INCOME STATEMENT

8. CAPITAL :- CAPITAL IS TERM FOR FINANCIAL ASSETS , SUCH AS FUNDS HELD IN DEPOSIT
ACCOUNTS AND /OR FUNDS OBTAINED FROM SPECIFICE FINANCIAL SOURCES . CAPITAL
ASSETS ARE ASSETS OF A BUISNESS FOUND ON EITHER THE CURRENT OR LONG TERM
PORTION OF BALANCE SHEET

9. DRAWING :- A DRAWING ACCOUNT IS AN ACCOUNTING RECORD MAINTAINES TO TRACK

MONEY WITHDRAWN FROM BUISNESS BY ITS OWNERS . A DRAWING ACCOUNT IS USED
PRIMARILY FOR BUISNESSES THAT ARE TAXED AS SOLE PROPRITORSHIP

10. BAD DEBTS :- AN EXPENSE THAT A BUISNESS INCURS ONCE THE REPAYMENT OF CREDIT
PREVIOUSLEY EXTENDED TO A CUSTOMER IS ESTIMATED TO BE UNCOLLECTIBLE . BAD
DEBT IS A CONTINGENCY THAT MUST BE ACCOUNTED FOR BY ALL BUISNESSES WHO 4
EXTEND CREDIT TO CUSTOMERS , AS THERE IS ALWAYS A RISK THAT PAYMENT WILL NOT BE