1- Book keeping - Book keeping is the art of recording and classifying the business transactions in set of books.
2- Accounting- Accounting is the art of recording, classifying, summarising, checking the business transactions and interpreting the result of a business.
3- Accountancy- Accountancy is the systematic knowledge of accounting. It explains how to deal with various aspects of accounting. It inform us why and how to maintain the books of account.
4- Account- Account is a summarised record of transaction relating to a particular head at one place.
5- Commerce- Commerce include all the activities related to the distribution of goods and services. It is a link between producer and consumer.
6- Double Entry System- Double entry system of accounting was developed in 1494 by Luca Pacioli.
In this system each transaction has two parts: i- Debit ii- Credit.
Each transaction has recorded once in the debit side and again in credit side as per certain principle.
7- Business Transaction- Business transactions are those transaction which affect the business in direct and indirect form. Business transactions are divided into two categories-
i- Cash transaction
ii- Credit transaction
8- Capital- Amount invested by the proprietor or partner in the business, is called capital.
9- Drawings- Amount or goods withdrawn by the proprietor from business for personal uses, is called drawing.
10-Liability- Amount payable by the business to the outsiders and to the proprietor, is called liability.
11-Assets- Assets are the property and legal rights owned by the business which can be measured in money terms.
12-Revenue- Amount received or receivable by the business through their operating activities during an accounting period, is called revenue.
13- Income- Profit earned during the accounting period by the business, is called income.
In other words, excess of revenue over the expenses is called income.
14- Expenses- The cost incurred to generate the revenue, is called expenses.
Expenses can be divided into two categories-
i- Cash expenses
ii- Non-cash expenses
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