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Entry

______________

means record a transaction in book of account. In account every entry has two effects, one debit effect and other credit effect.

Transaction

__________ is an exchange of goods, services, and cash between persons. There are two types of transactions, economical (financial) & noneconomical (non-financial). Only economical transactions are recorded in books of account.

Voucher
Document

which support the business transaction, which has been entered in the book of account. Bills Invoice

Debit
_________

means receivable or thing owned. Suggest the benefit is received. Receiver of benefit is debited.

Paid

Telephone Bill Rs. 1000. Purchased Plant & Machinery worth Rs. 1,00,000. ABC ltd. buys the good on credit from XYZ ltd., worth Rs. 10000

Credit
_________

means

Received

Interest &

give. Suggests that the account has given the benefit. An account which give the benefit is credited.

Dividend. Capital of the business. ABC ltd. buys the good on credit from XYZ ltd., worth Rs. 10000

Journal
A

book in which double entry is made. A transaction when takes place, immediately entered in this book.

Subsidiary book
Separate

journals are kept for particular types of the transaction, which is called as Subsidiary book. E.g., purchase book, cash book, etc.

Account

__________ is a summarized record of the transaction at one place relating to one person, one kind of property or one class of expenses or incomes.

Ledger
It

is a main book of account. In this book all accounts are prepared separately.

Balance
Difference

between the total of debit side and credit side of an account opened in a ledger for a specified period is called __________

Goods
__________

are those products which are bought/produced by businessman for resale to make profit.

Stock
_________

is the balance of goods which remains unsold.

Debtor
Person

who owes debt to business. Which means from whom we have to take money. If goods are sold to a person on credit, then the person is a debtor for us.

ABC

ltd. buys the good on credit from XYZ ltd., worth Rs. 10000

Creditor
________

is a person to whom debt is owed by business. __________ is a person to whom we have to pay money.

ABC

ltd. buys the good on credit from XYZ ltd., worth Rs. 10000

Liability
They

are the debt which a business owns to others. The amount payable by business for goods purchased or for loan taken for services rendered to the business.

Debenture Provisions Unsecured

Loans Current ********* Contingencies

Liabilities = Assets - Capital

Assets
__________

are all those things or rights which are owed business and have monetary value. These are properties which help to run the business.

Fixed

Assets Investments Current Assets Advances & Loans Miscellaneous Expenditure.

Fixed assets
_________

are those which are not purchased for resale, which help running of the business and whose benefit is available for a long time.

P&M Land Goodwill Patent copyright

Current assets
__________

are those assets which are constantly converted into cash Other assets whose values go on changing every day

Debtor Stock Cash Bank

Balance Bills Receivable

Tangible assets
__________

assets have a physical existence. Which can see and touch.

P&M Land Furniture

& Fixtures

Intangible assets
____________

not physical existence but it has a monetary value.

Goodwill Patent Copyright Trademark

Capital
Amount

invested by the proprietor in a business is called_________

Dhirubhai

started his business with Rs. 5000.

Drawing
Value

of cash or goods or any other assets withdraw from business by a proprietor for his personal or domestic use.

Mr.

Patel submits Rs. 1,00,000 as donation for getting admission of his son in VTCBB.

Solvent
A

person is said ________ when his assets are more than his liability

Assets

> Liability

Insolvent
A

person is said ________ when his assets are less than his liability

Assets

< Liability

Expense
________

is the money spend for conducting a business.

Telephone

bill Electricity bill Salary Wages Depreciation

Revenue Expense
_________

expense incurred for day to day. Eg. Salary Rent Insurance premium

Capital expenses
_________

expense result into acquisition of assets.

Land P&M Furniture Preliminary

Expenses

Bad Debts
If

out of the amount receivable, some amount is not received, from debtor then it is loss of the business.

ABC

ltd. Who bought goods on credit worth Rs. 10,000, has been declared insolvent and there are no scope to receive those money back.

Discount
If

the businessman agree to receive some amount less than the printed price of the amount show in the invoice, the difference is called _________

On

cash purchase of goods worth Rs.1000, the seller charged only Rs. 950 only.

Gross profit
When

the sales are more than the purchase price of the goods plus purchase expense, then difference is the _________

Trading

Account Sales Cost of Sales

Net profit
_______

is a surplus left after deducting all expenses from gross profit and adding other incomes to it

Profit

& Loss Account

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