Accounting is a very interesting subject. It is basically, keeping a track of all the financial movements of an organisation or individual. This process helps to assess the overall financial wellbeing of an organisation or entity. Through accounting it is possible to adopt healthy financial practices to nurture financial growth of the concerned institutions. It involves keeping track of financial transactions, profit/ loss accounts, assessing company assets and liabilities etc.
It is always tough for the students to understand and solve their corporate accounting assignment on time. But corporate accounting assignments help experts make it easy for the students.To sum up it is the continuous financial auditing of an institution practiced to patch the loopholes if any and strike the right balance between assets and liabilities.
WHAT ARE ACCOUNTING TERMS
Like every other discipline, accounting too has a language of its own, that facilitates the general functioning of the accounting system. This language comprises certain specific terms that signify a specific operation or set of operations. Accounting terms are basically these terms that help the learners to understand the concepts and allow the inmates to communicate better.
WHO NEEDS TO KNOW ACCOUNTING TERMS
Persons aspiring to pursue a career in accounting must meet this precondition. Actually it is not a precondition; it is just a basic introduction to the common terms that are extensively used in the accounting business. It is just to familiarize individuals with the aforesaid operations through the subject specific terms. As mentioned before, these terms ease the communication and daily transaction of business in the concerned sphere of work.
TOP 10 ACCOUNTING TERMS TO KNOW FOR THE BEGINNERS
This term is used to refer to valuable resources. These resources have monetary value and provide security to the owner against financial crisis. The commodities that can be classified as assets are gold, money lent, treasury bills etc, since they fetch additional cash or profit for the owner.
Liabilities refer to the financial obligations of the owner. The liabilities signify that the owner has to pay back for their current holding of cash or any other cash equivalent with monetary value. Some examples of liabilities are interest on loans, taxes, mortgage debt etc.
Credit in accounts popularly refers to the agreement between signatories regarding borrowing of money. It signifies that the borrower is receiving money from the other party and is obliged to pay back the amount later with a nominal fee for the service.
Capital is the core fund that is available with business or an entity to nurture its financial operations. It is elemental in the establishment and functioning of businesses. Accounting deals with various operations and transactions that are performed with this capital amount. It is also the monetary value of the concerned entity.
Debits can be referred to as an increase in the assets or a decrease in the liabilities. In other words it is explained as the payment of an amount from an account. This payment decreases the liability on the account that pays the amount and increases the asset with the person who receives such payment.
Insolvency refers to the incapability of an entity or an individual to pay the debt back to the lenders. This insolvency can be categorised into two types that are balance sheet insolvency, that is visible on balance sheets, and the cash flow insolvency, that is not apparent but exists in reality.
Gross income is the overall income of a business entity. On the other hand the Net income is the actual income that is left with the business entity earning it, after deducting taxes, equity shares and other such expenditures for which the entity is liable.
Balance sheet is a document that records all the income and expenditure of the business entity. This is used to keep track of all the incoming and outgoing money that is circulating through the entity. All the records of profit, loss, income, expenditure etc are kept through balance sheets.
Gross/ Net profit
Gross profit is the aggregate profit of a firm or business entity, while net profit is the amount left with the business entity after sharing the profit with other shareholders directly or through share market.
Cash flow accounts for the total amount of cash or other cash equivalent that is being circulated in and out of a business firm. It actually justifies the term “cash flows”, since it is the measure of cash flowing through a firm.
The above mentioned terms are vital for learning deeper concepts in accounting. These terms are very basic in nature and form the foundations of accounting. Anyone aspiring to pursue learning a subject has to go through the introductory part before starting with the fundamental parts. Going through the basic communication terms of that subject is a proven way to cut short the introductory phase. These terms are the must know terms for accounting and give a quick insight into the accounting business.
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