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AAT Level 2 Accounting Costing Accounting Finance Computerised
 
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Basic Accounting 1
   

Basic Accounting Terminologies

  • Assets: Are the resources owned by the business (property, motor vehicles, bank balance, cash, debts owing to the business, etc.)
  • Liabilities : Are moneys owed by the business for goods supplied, for expense items and for amounts borrowed that have not yet been paid for.
  • Expenses : Are items of expenditure “used up” by the business. Includes wages, insurance, repairs, rent, etc.
  • Purchases: Are of goods for resale.
  • Capital – This is the amount supplied by the owner (s) to the business (it is regarded as a liability to the business). Capital is often called the “owner’s equity”.
  • Debtors - Are people or other firms who owe money to the firm. This usually happens where the firm has sold goods on credit
  • Creditors: Are people or other firms to whom money is owed. This usually happens when the firm buys goods on credit
   
 
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