Basic Terms in Accounting Part 1

Assets : Assets are things of value owned by                the business

1. Fixed assets : The assets which is intended to be used for long period or above one year

• Tangible assets: These are assets having         definite shape and physical existence      

• Intangible assets: Assets having no physical existence but are represented by rights in certain things

• Wasting assets: Assets which get exhausted to the extent of extraction

• Fictitious assets: These have no real value but are shown in the books of accounts only for technical reason

 2. Current Assets : Current Assets are those       assets which can be converted into cash       within a short period of time

 3. Capital : Money or money's worth                   invested by the owner into the business

 4. Drawings : The amount of cash or other         assets withdrawn by the owner of the           business

 5. Revenue : The amount earned by selling       its products or services

 6. Voucher : It is the documentary evidence
     of transaction

 7. Liabilities : Liabilities are the obligations

     or debt payable the company in future in       the form of money or goods

• Fixed Liabilities :  Liabilities which are payable after a long period or above one year.                     

• Current Liabilities :   Liabilities which are payable within a short period or less than one year