Some useful Accounting Terminology

Assets:-
resources or things of value that are owned by a company.
Ex: cash, accounts receivable, inventory, investments, land, buildings,
and equipment.
A company may state that its employees are its most valuable asset.
However, the employees cannot be included as an asset on the
company's balance sheet. Similarly, a company may have successfully
promoted its products, services and brands throughout the world and
the brands are now the company's most valuable assets. Yet these
brands and trademarks cannot be reported as assets on the
company's balance sheet
fixed & Current assets
Fixed assets are those assets which are purchased for the purpose of
operating the business and not for resale. E.g. land, building,
machinery, furniture, etc.
Current assets are balance sheet accounts that represent the value of
all assets that can reasonably expect to be converted into cash within
one year. Current assets include cash and cash equivalents, accounts
receivable, inventory, marketable securities, prepaid expenses and
other liquid assets that can be readily converted to cash.
intangible asset, Debtors
An intangible asset is an asset that you cannot touch. Examples of
intangible assets include copyrights, patents, mailing lists,
trademarks, brand names, domain names, and so on.
Debtors:- A person who owes money to the firm, generally on
account of credit sale of goods is called a debtor.
For e.g. When goods are sold to a person on credit that person pays
the price in future. He is called a debtor because he owes the amount
to the firm.
 Liabilities:-If an amount is due to be paid to any other person or
institution other than the owner it is called as a liability.
Liabilities can be classified into following:
i) Long-term liabilities: These are those liabilities which are payable
after a long term, (generally more than one year).
Example; Long-term loans, debentures etc.
ii) Current liabilities: These are those liabilities which are payable in
near future ,(generally within one year).
Example; creditors, bank overdrafts, bills payable, short-term loans,
etc.
owner's equity
Owner's equity represents the owner's investment in the business minus
the owner's draws or withdrawals from the business plus the net income
(or minus the net loss) since the business began.
It is also known as "net assets," since it is equivalent to the total assets of a
company minus its liabilities, that is, the debt it owes to non-shareholders.
Shareholders' equity can be either negative or positive. If the figure is
positive, it means the company has more than enough asset value to cover
its liabilities. If the figure is negative, the company has debts that outweigh
its assets. In general, a company with negative shareholders' equity is not
considered a safe investment choice, because either its asset total is too
low or its liability total is too high. In either case, the company has more
debt than its current assets can possibly satisfy, putting it at risk of loan
default and bankruptcy.
balance sheet
A balance sheet is a financial statement that summarizes a company's
assets, liabilities and shareholders' equity at a specific point in time.
These three balance sheet segments give investors an idea as to what
the company owns and owes, as well as the amount invested by
shareholders.
The balance sheet adheres to the following formula:
Assets = Liabilities + Shareholders' Equity
Income Statement
An income statement is a financial statement that reports a
company's financial performance over a specific accounting period.
Financial performance is assessed by giving a summary of how the
business incurs its revenues and expenses through both operating
and non-operating activities. It also shows the net profit or loss
incurred over a specific accounting period.
Journal
A journal is a detailed account that records all the financial
transactions of a business, so that they can then be used for future
reconciling and transfer to other official accounting records, such as
the general ledger.

A journal states the date of a transaction, which accounts were

affected and the amounts, usually in a double-entry bookkeeping
method.
Ledger
What is a 'General Ledger'
A general ledger is a company's set of numbered accounts for its
accounting records. The ledger provides a complete record of
financial transactions over the life of the company. The ledger holds
account information that is needed to prepare financial statements
and includes accounts for assets, liabilities, owners' equity, revenues
and expenses.