Accounting Vocabulary Semester 1

Front 1

Capital

Back 1

The value of investment into a business by its owner

Front 2

Assets

Back 2

The valuable resources owned by a business, can be either fixed or current

Front 3

Liabilities

Back 3

The debts the business owes, can be either long-term or current

Front 4

Debtors

Back 4

The customers of the business who bought goods on credit and still have to pay for them.

Front 5

Creditors

Back 5

The suppliers of the business who sold goods on credit to the business and who still need paying

Front 6

Cash Transaction

Back 6

A transaction where cash or cheques are used to pay immediately

Front 7

Credit Transaction

Back 7

A transaction where a debt is incurred, and payment will come later

Front 8

Purchases

Back 8

Only applies when dealing with the buying of stock with the intention of re-sale

Front 9

Sales

Back 9

Only applies when the stock being sold was bought with the prime intention of re-sale

Front 10

Sales Returns

Back 10

Created when a debtor returns unsatisfactory goods to the business

Front 11

Purchases Returns

Back 11

Created when the business returns unsatisfactory goods to its suppliers

Front 12

Drawings

Back 12

Created when the owner takes goods or cash out of the business for his/her own personal use

Front 13

Expenses

Back 13

Consist of all the bills the business must pay in order for it to run, eg wages, electricity and rent

Front 14

Revenues

Back 14

These are sources of income to a business. The main one is sales, but rent received and discounts received are common ones as well

Front 15

Real Accounts

Back 15

These are physical accounts, that we can touch. These accounts cannot have a credit balance b/d

Front 16

Nominal Accounts

Back 16

These are the accounts of things that don't have a physical existence, like the expenses, sales, purchases and capital

Front 17

Personal Accounts

Back 17

These are the accounts of the business' debtors or creditors

Front 18

Debit Side

Back 18

This is the left side of an accounting page

Front 19

Credit Side

Back 19

This is the right side of an accounting page

Front 20

Accounting Equation

Back 20

A basic equation shown in the Balance Sheet. It is when Assets = Capital + Liabilities