Drawings:

The cash or goods taken from the business by the owner for his own use is called drawings.

Debtors / Account Receivable:

Debtors are the customers to whom goods are sold on credit basis and from whom the money is received in near future. These are also called Account Receivable.

Capital Reserve:

Profit generated from non normal sources of business is called capital profit, reserve/s created out of this profit is called capital reserve.

Cost Price of an Asset:

Total of all expenses involved in carrying + installing the asset.

Capital Fund:

Excess of total assets over total external liabilities of a non profit making organization is called capital fund.

Compensating Errors:

The errors which are occurred with the same amount on both side of two or more accounts and cancelled the effect of error is called compensating errors.

Capital Payment:

The amount which is paid on account of capital expenditure is called capital payment e.g a machinery is purchased for US$ 10000, Freight for this Machinery is paid US$ 100 the total US$ 10100 is capital payment.

Capital loss:

Loss suffered by a business on the sale of fixed assets e.g an asset is purchased for US $ 10000 while later on it sold for US $ 9800 the difference of US $ 200 is capital loss.

Capital Profit:

Profit which is earned on the sale  of fixed assets e.g an asset having cost US $ 10000 and it is sold in US $ 10200 the difference of US $ 200 is capital profit.

Capital Receipts:

Receipts which are not re-recurring by nature and the benefits of those are enjoyed over a long period are called capital receipts e.g capital invested by owner, sale of proceeds of fixed assets.

Capitalized Expenditures:

Some expenditures although of revenue nature basically are directly connected with fixed assets and spent directly on the acquisition of fixed assets. Such expenditures are added to the cost of the assets and are called capitalized expenditures e.g Freight paid for newly bought machinery.

Contingent Liabilities:

The liabilities which are not liabilities at present but may or may not become liability in future. these depend upon certain future event or events.

Current Liabilities:

The debts which are repayable within  one year are called current liabilities e.g Creditors, Accounts Payable, Bank Overdraft etc.

Current Assets:

Assets that can be converted into cash quickly to meet the short term liabilities are called Current Assets. e.g Cash, Bank A/C, Stock, Account Receivable etc

Closing Entries:

At the end of accounting period, accounts relating to expenses and incomes are closed by transferring their balances to Trading and Profit and Loss Account. These types of entries are called closing entries.

Contra Entry:

An entry in which both cash and bank accounts are involved and it is recorded on both sides of cash book.