Saturday, 4 January 2014
Cash Account:
An account of ledger in which only cash transactions are posted from cash book or cash journal is called cash account.
Cash Book:
A book in which all cash transactions are recorded is called cash book. No credit entries are involved in cash book. It is also called cash journal.
Credit Balance
An account having credit side heavier than debit side the balance is called credit balance.
Compound Entry:
An entry in which more than one accounts are debited or credited is called compound entry.
Credit Transaction:
If the payment is not made immediately in cash for the value received is called Credit Transaction e.g Vehicle bought on account or on credit. In this payment is made in future.
Cash Transcation:
If the payment is made immediately in cash for the value received is called cash transaction e.g Vehicle purchased for cash.
Cost concept:
Under this " an asset is recorded in the accounting record on the basis of price paid to acquire it."
Cost Accounting:
The basic object of this is to determine the cost of goods manufactured or produced by the business entity.
Creditors / Accounts Payable:
These are those persons from whom goods have been purchased or services have been received on credit basis and to whom payments are made to them in near future. These persons are also called Accounts Payable.
Thursday, 2 January 2014
Balance Sheet:
It is a statement that shows the financial position of the business entity on a particular date. It is a statement of Assets, Liabilities and capital.
Bank Reconciliation Statement:
If there is any discrepancy arises between the balance of the Cash Book and that of Pass book, the depositor prepares a statement to explain the causes of discrepancies and to reconcile the two balances. This statement of explanation is called Bank Reconciliation Statement.
Bank Overdraft:
The amount which is excess withdrawn by the customer than his deposits in his bank account.
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