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