Transaction Accrued Expenses Or Outstanding Expenses Prepaid Expense Contra Entry Imprest Depreciation L.F/Ledger Folio Deferred
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Transaction An agreement between a buyer and a seller to exchange an asset for payment. In accounting, any event or condition recorded in the book of accounts. Accrued expenses or outstanding expenses Expenses which have been incurred but not been paid for till the end of the accounting year are known as Accrued expenses or outstanding expenses. For example, Total salaries to be paid for the year were $10,000, but by the end of the year $1000 were not paid and will be treated as outstanding salary. Prepaid Expense A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received in the near future. While prepaid expenses are initially recorded as assets, their value is expensed over time as the benefit is received onto the income statement, because unlike conventional expenses, the business will receive something of value in the near future. Contra Entry A contra entry is an entry, where a debit is cancelled by the same amount of credit on same account. It is written on both sides of the account, because it effects an account twice i.e. from debit side and credit side. Imprest A fund used by a business for small items of expenditure and restored to a fixed amount periodically. "This petty cash is kept on the imprest system" Depreciation A reduction in the value of an asset over time, due in particular to wear and tear. "Provision should be made for depreciation of fixed assets" L.F/Ledger Folio Ledger is book in which we keep an account under a separate name for all types of accounts. Folio means page number. So L.F. means the page number in Ledger on which that particular account exists. Deferred revenue expenditure Deferred revenue expenses are those expenses that have been incurred in the accounting period and not to create any assets, but its benefits spread over more than one accounting period former advertising cost GAAP Generally Accepted Accounting Principles: A Collection of Rules and Procedures and Conventions That Define Accepted Accounting Practice; Includes Broad Guidelines As Well As Detailed Procedures Asset In financial accounting, an asset is an economic resource. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset Capital Capital is the amount of cash and other assets owned by a business. These business assets include accounts receivable, equipment, and land/buildings of the business. Capital can also represent the accumulated wealth of a business, represented by its assets less liabilities. Drawings Drawings is any money taken out of the business for the owners own personal use. Entity In accounting, a business or an organization and its owners are treated as two separately identifiable parties. This is called the entity concept. Accounting entry a written record of a commercial transaction Stock In accounting there are two common uses of the term stock. One meaning of stock refers to the goods on hand which is to be sold to customers. In that situation, stock means inventory. The term stock is also used to mean the ownership shares of a corporation. Cash Account an account with a securities brokerage whose transactions are settled on a cash basis Creditor A creditor is a party (e.g. person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. Debtor A debtor is an entity that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person .