Basics Flashcards
Transaction
Transfer of money or money’s worth (goods, services, ideas) from one person to another
Cash transaction
Transaction that involves immediate cash receipt or immediate cash payment
Credit transaction
Transaction in which cash is not paid or received immediately, but will be received or paid later
Account
An account opened for a person, asset, expense, income, etc. In ledger, an account is a summary of transaction under a head.
Capital
Amount invested by an owner or proprietor in an organisation
Drawings
Amount of cash or value of goods, assets, etc. withdrawn from the business by the owner for the personal use of the owner
Voucher
Any written or printed document in support of a business transaction is called a voucher. Eg. cash receipt, invoice, cash memo, bank pay-in-slip, etc
Invoice
Statement prepared by a seller of goods to be send to the buyer. It shows details of quantity, price, value, etc. of the goods and any discount given, finally showing the net amount payable to the buyer
Goods
Articles, things or commodities in which a business is dealing with
Purchases
Buying of goods with an intention of resale is called purchase
Purchase return or return onwards
When goods brought are returned to the supplier
Sales
When goods meant for resale are sold
Sales return or sales inwards
When goods brought are returned to the buyer
Stock
Unsold goods
Income
Amount receivable or realised for sales of goods and earnings from interest, dividend, commission, etc.
