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    Pankaj Singh
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    The document defines key accounting terms: - Capital account refers to the initial cash, goods, or assets brought into a business by its owner. - Drawing is the amount withdrawn by the business owner for personal use. - A debtor owes money to the business, such as a customer who purchases on credit. A creditor is owed money by the business, like a supplier paid on credit terms. - Capital expenditures are long-term purchases used to generate profits, while revenue expenditures are recurring costs like selling and travel expenses. - Trade and cash discounts incentivize early payment from customers or retailers. - An accounting year is a 12-month period over which financial statements are prepared.

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    The document defines key accounting terms: - Capital account refers to the initial cash, goods, or assets brought into a business by its owner. - Drawing is the amount withdrawn by the business owner for personal use. - A debtor owes money to the business, such as a customer who purchases on credit. A creditor is owed money by the business, like a supplier paid on credit terms. - Capital expenditures are long-term purchases used to generate profits, while revenue expenditures are recurring costs like selling and travel expenses. - Trade and cash discounts incentivize early payment from customers or retailers. - An accounting year is a 12-month period over which financial statements are prepared.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    14 views3 pages

    Account

    Uploaded by

    Pankaj Singh
    The document defines key accounting terms: - Capital account refers to the initial cash, goods, or assets brought into a business by its owner. - Drawing is the amount withdrawn by the business owner for personal use. - A debtor owes money to the business, such as a customer who purchases on credit. A creditor is owed money by the business, like a supplier paid on credit terms. - Capital expenditures are long-term purchases used to generate profits, while revenue expenditures are recurring costs like selling and travel expenses. - Trade and cash discounts incentivize early payment from customers or retailers. - An accounting year is a 12-month period over which financial statements are prepared.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    What is Capital Account?

    The amount of cash goods or any other asset which is bring by owner of company while starting the business with cash or furniture.

    What is drawing?

    Drawing is an amount withdrawn by businessman or owner of company for his personal use,

    For example: - Goods withdrawn for personal use

    What is a debtor?

    A person who owes something is called as debtor, Debtor means account receivable,

    For example: - A businessman sales goods on credit basis to Mr. Sunil, in this case Sunil is debtor of company.

    What is Creditor?

    A person to whom something owing is called as creditor, Creditor means account payable,

    For example: - From Anil, Business have purchased goods on credit that Anil is Creditor of company.

    What is Capital expenditure?

    Capital expenditure is such an expenses paid for purchase of long term asset which is use for earn profit in business.

    What is Revenue Expenditure?

    Revenue expenditure is an amount which is spent for earn profit is called as revenue expenditure. It is paid on nominal account for specific period; it is more or less than recurring expenses.

    For example: - Selling expenses, travelling expenses.

    What is trade discount?

    Trade discount is an allowance made by wholesaler to retailer on printed price or invoice price. The object of Trade discount is Enable to retailer for sale the goods and earn a margin of profit, after meeting all necessary expenditure.

    Trade discount doesnt appear in books of account; both the sender and buyer record the net amount of transection that is after deducting trade discount.

    For example :- if a wholesaler sale LUX soap for Rs-20 which having MRP Rs-24

    What is Cash discount?

    Is an allowance made by creditor to debtor to get early payment, sometime its happened that after allowing credit to debtor the creditor make need fund or money those cash discount an incentive occurred to debtor.

    What is solvent?

    A person is said to be solvent when his asset exceed to liability.

    For example: - Ashish having machinery of Rs-50000 and he has borrowed some loan of Rs-30000.

    What is Insolvent?

    A person is said to be insolvent when his liability are exceed than his Asset

    For example: - A person having asset worth Rs-75000 and his liability are of Rs-100000

    What is Accounting year?

    Accounting year is a period of 12 month for which book of accounts are maintained and closed for containing the business result in terms of profit and loss. Accounting year may be a calendar year (1st Jan31st-Dis).

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