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8:16 fn Oo tee?, , , , < —-HSSRptr PlusOne.. QQ G :, , 4d) Fictitious Assets: Assets which have no real value but are shown in the books of accounts only for technical, reasons are called fictitious assets., , eg: Preliminary expenses, Discount on issue of shares and debentures, underwriting commission., , 4. Liabilities — Liabilities are obligations or debts that an enterprise has to pay at some time in the future. It can, be classified into two, , a) Current Liabilities: These are li, year)., , Eg: Short Term Borrowings, Trade Payables, Creditors, Outstanding expenses ete., , 'b) Non-Current Liabilities: Liabilities which are payable after a long period are termed as long term, liabilities., , eg:Long Term Loans ,Other Long Term Liabilities, Debentures ete., , 5. Capital: Amount invested by the owner in the firm is known as capital, , 6. Sales: Sales are total revenues from goods or services sold or provided to customers. Sales may be cash sales, or credit sales., , 7. Revenues:These are the amounts of the business earned by selling its products or providing services to, customers, called sales revenue. Revenue is also called income., , Eg:commission, interest, dividends, royalties, rent received, etc., , 8. Expenses: Costs incurred by a business in the process of earning revenue are termed as expenses., , eg. Depreciation, salaries, rent, stationery, light and heat, ete, , 9.Expenditure: Spending money or incurring a liability for some service or property received is called, expenditure., , Eg. Purchase of goods, Purchase of machinery, ete, , 10. Profit: Excess of revenues over the related expenses during an accounting period is termed as profit. Profit, increases the owner’s funds, , 11. Gain: Profit arises from the events or transactions which are incidental to business is called gain., , eg. Profit of Sale of fixed assets, increase in the value of assets, etc., , 12. Loss: Excess of expenses over the related revenues during an accounting period is termed as loss., , 13. Discount: Discount is the deduction in the price of the goods sold., , 14, Voucher: The documentary evidence in support of a transaction is known as voucher., , 15. Goods: It refers to the products in which the business unit is dealing, , 16. Drawings: Withdrawal of money and/or goods by the owner from the business for personal use is known as, drawings, , 17. Purchases: Purchases are total amount of goods procured by a business on credit and on cash, for use or, sale, , 18. Stock: It is a measure of something on hand - goods, other items in a business is called stock Stock is also, called inventory,, , 19. Debtor: A debtor is a person who owes money to the business firm as he received some benefits from the, business., , 20. Creditor: A creditor is a person whom the business owes money as he has given some benefit to the, business., , , , ilities which become due and payable within a short time (within one, , —, , Vijayabheri Malappuram District Panchayath | Page-2, , , , CHAPTER-2, THEORY BASE OF ACCOUNTING, , GAAP: In order to ensure uniformity in accounting procedures and methods, certain accounting principles have, been accepted by accountants all over the world. The rules and guidelines used in preparing accounting reports are, termed as Generally Accepted Accounting Principles (GAAP)., , Basic Accounting Concepts: The basic accounting concepts are referred to as the fundamental id, ‘assumptions underlying the theory and practice of financial accounting and are broad working rules: oO, , activities. The important conceptsare:, , L Business Entity: This concept assumes that business has distinct and separate entity from its owners., , = C a3