Expenses
Costs incurred by a business for earning revenue are known as expenses. For example: rent, wages, salaries, interest etc.
Expenditure
Spending money or incurring a liability for acquiring assets goods or services is called expenditure. The expenditure is classified as.
1. Revenue Expenditure : If the benefit of expenditure is received within a year, it is called revenue expenditure. For example: rent interest etc.
2. Capital Expenditure : If benefit of expenditure is received for more than one year, it is called capital expenditure. Example purchase of machinery
3. Deferred Revenue Expenditure: There are certain expenditures which are revenue in nature but benefit of which is derived over number of years. For example: huge advertisement expenditure
Profit
The excess of revenues over its related expenses during an accounting year is profit.
Profit = Revenue - Expenses
Gain
A non- recurring profit from event or transaction incidental to business such as sale of fixed assets, appreciation in the value of an assets etc.
Loss
The excess of expenses of a period over its related revenue is to earned as loss.
Loss = expense - revenue
Goods
The products in which the business deal in. The items that are purchased for the purpose of resale and not for use in the business à re called goods.
Purchase
The terms purchase is used only for the goods procured by a business for resale. In case of trading concerns it is purchase of final goods and in manufacturing concern it is purchase of raw materials. Purchases may be cash purchases or credit purchases
Purchase return
When purchased goods are returned to the suppliers, these are known as purchase return.
Sales
Sales are total revenues from goods sold or serviced provided to customers. Sales may be cash sales or credit sales.
Sales return
When sold goods are returned from customer due to any reasons is known as sales return.
Debtors
Debtors are persons and or other entities to whom business has sold goods and services on credit and not received yet. These are assets of the business.
Creditors
If the business buys goods/services on credit and amount is still to be paid to the persons and /or other entities, these are called creditors. These are liabilities for the business.
Bill Receivable
Bill receivable is an accounting term of bill of exchange. A bill of exchange is bill receivable for seller at time of credit sale.
Bill Payable
Bill payable is also an accounting term of bill of exchange. A bill of exchange is bill payable for purchaser at time of credit purchase.
Costs incurred by a business for earning revenue are known as expenses. For example: rent, wages, salaries, interest etc.
Expenditure
Spending money or incurring a liability for acquiring assets goods or services is called expenditure. The expenditure is classified as.
1. Revenue Expenditure : If the benefit of expenditure is received within a year, it is called revenue expenditure. For example: rent interest etc.
2. Capital Expenditure : If benefit of expenditure is received for more than one year, it is called capital expenditure. Example purchase of machinery
3. Deferred Revenue Expenditure: There are certain expenditures which are revenue in nature but benefit of which is derived over number of years. For example: huge advertisement expenditure
Profit
The excess of revenues over its related expenses during an accounting year is profit.
Profit = Revenue - Expenses
Gain
A non- recurring profit from event or transaction incidental to business such as sale of fixed assets, appreciation in the value of an assets etc.
Loss
The excess of expenses of a period over its related revenue is to earned as loss.
Loss = expense - revenue
Goods
The products in which the business deal in. The items that are purchased for the purpose of resale and not for use in the business à re called goods.
Purchase
The terms purchase is used only for the goods procured by a business for resale. In case of trading concerns it is purchase of final goods and in manufacturing concern it is purchase of raw materials. Purchases may be cash purchases or credit purchases
Purchase return
When purchased goods are returned to the suppliers, these are known as purchase return.
Sales
Sales are total revenues from goods sold or serviced provided to customers. Sales may be cash sales or credit sales.
Sales return
When sold goods are returned from customer due to any reasons is known as sales return.
Debtors
Debtors are persons and or other entities to whom business has sold goods and services on credit and not received yet. These are assets of the business.
Creditors
If the business buys goods/services on credit and amount is still to be paid to the persons and /or other entities, these are called creditors. These are liabilities for the business.
Bill Receivable
Bill receivable is an accounting term of bill of exchange. A bill of exchange is bill receivable for seller at time of credit sale.
Bill Payable
Bill payable is also an accounting term of bill of exchange. A bill of exchange is bill payable for purchaser at time of credit purchase.
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