BASIC TERMS OF FINANCE

BY: DEWANG SHARMA

ROLL NO: 46

DEPARTMENT: BCOM HONOURS

 CONTENTS

 BUSINESS TRANSACTION
 ACCOUNT
 CAPITAL
 ASSETS
 LIABILITY
 EXPENSE
WHAT IS A BUSINESS TRANSACTION

• The term business transaction means a financial transaction or economic event entered
into by two parties that initiates the accounting process by recording them in the books of
accounts of an enterprise.
WHAT IS AN ACCOUNT

• It is a record of transactions under a particular head.

• For instance Salaries A/C, Telephone expenses A/C, Electricity Expenses A/C
WHAT IS CAPITAL

• It is the amount invested in an enterprise by the proprietor or by partners in a partnership

firm.
WHAT ARE ASSETS

• Assets are the properties owned by an entity or enterprise

• They are the economic resources of the business
• For example, Building Plant and Machinery
WHAT IS A LIABILITY

Liability is amount owed by the business

Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.

If assets are the resources your company owns that contribute to its economic value, liabilities are its exact
opposite. In fact, liabilities are just that — things your company is responsible for by law, especially debt or
financial obligations.
WHAT ARE EXPENSES

Expense is the cost incurred for generating revenue

For example salaries, wages