Useful Accounting words meaning part 2

F

Financial statements - Balance sheet, income statement, cash flow statement, and statements of shareholders’ equity.

Financial transaction - An exchange between a business and one or more external parties to a business. It has a monetary impact on the financial statements of a business.

Fundamental accounting concepts - They are concepts governing the accounting system and include going concern, consistency, accruals, matching principle, and conservatism.

Fundamental accounting equation - Assets =

Non Trading Organizations Account

 

Receipt and Payment Account

It is a real account. The basic rule of double entries is followed to prepare this account. It is prepared from a cash book at the end of the accounting period. Every transaction regarding the cash transactions is recorded in the Cash Book in chronological order. We may say that the Receipt and Payment account is a summary of cash payments and cash receipts during the current year. if rent and salary paid on monthly basis all over the accounting period, and donation or subscription received during the current year recorded in a cash book date wise but at the end of the accounting period, the Receipt and Payment account will contain the total amount of rent paid, salary paid, subscription received and donation received. All cash a receipt will be recorded on the debit side and all cash payment will be recorded on the credit side.

Income and Expenditure Account

Income and expenditure account is a nominal

Non Trading Organizations

Sole proprietorships, Limited companies, and partnership are business organizations which have been formed for the purpose of making profits. To ascertain whether they make profits or losses these organizations prepare

Useful Accounting words meaning part 1

 A

Accounting - It is a system that collects, processes, analyzes, measures, and records financial information of a firm and reports that information to decision-makers.

Accounting fraud - It is the intentional misrepresentation and abuse of accounting information including sales, revenues, expenses, assets, or liabilities to inflate earnings, stock values, obtain more loans, or avoid debt commitments.

Accounts receivables - They are promises to receive

Consignment Accounts

 Consignment accounts are petty trading and profit and loss account where we ascertain the profit or loss by sending goods to an agent known as a consignee. Consignment account goods sent on consignment account, consignees account, consignment debtors accounts are the accounts kept by the consignor while the consignee does not keep any accounts. He only prepares a document known as account sales describing the cash and credit sales,

Control Accounts

There are only two control accounts in accounts. They are

Measurement of the elements of financial statements

The elements of financial statements are measured in different ways depending on their nature. Here are some common methods used for the measurement of each element:

Assets: Assets are typically measured at historical cost, which is the original cost of acquisition. Alternatively, assets can be measured at fair value, which is the estimated market value of the asset.

Liabilities: Liabilities are typically measured at the amount owed, which is the amount of the obligation to be paid in the future. This includes amounts owed to creditors, loans, and other financial obligations.

Equity: Equity is typically measured at historical cost, which is the original amount of investment made by the owner(s) of the business. Alternatively, equity can be measured at fair value, which is the estimated market value of the equity.

Revenues: Revenues are typically measured at the amount earned during a specific period, which is the sales price of goods or services sold.

Expenses: Expenses are typically measured at the amount incurred during a specific period, which is the cost of goods or services consumed or used.

Gains and losses: Gains and losses are typically measured at fair value, which is the estimated market value of the asset or liability at the time of sale or disposal.

In summary, the measurement of financial statement elements is typically based on either historical cost or fair value, depending on the nature of the element being measured.

Why Organizations Engage in International Business?

Organizations engage in international business for a variety of reasons. One of the primary reasons is to expand their market reach and tap into new markets. By entering into international markets, businesses can access a larger customer base, increase their revenue, and diversify their income streams.

Another reason organizations engage in international business is to take advantage of lower production costs. For example, companies may move their manufacturing operations to countries where labor costs are lower, which can help reduce their production expenses and increase their profitability.

International business also allows organizations to access new technologies, knowledge, and resources. This can help businesses to improve their products and services, increase efficiency, and gain a competitive advantage in the marketplace.

Moreover, international business can also help organizations to reduce their risk and diversify their operations. By operating in multiple countries, companies can spread their risk across different markets and reduce their exposure to economic or political instability in any one country.

Finally, some organizations engage in international business to fulfill their social responsibility goals, such as supporting sustainable development, reducing poverty, or promoting human rights. These companies often see international business as a means to make a positive impact on society and contribute to global economic development.

Overall, engaging in international business can provide organizations with a range of benefits, including increased market reach, cost savings, access to new technologies and resources, risk reduction, and social responsibility fulfillment.

Sales Revenue

Accounts Receivable-Debit

Product Sales Revenue-Credit

Cost of Goods Sold-debit

Inventory- Credit 

Supplies Inventory-Debit

Accounts Payable -Credit

General Knowledge

Which of the country was not part of the Soviet Union in 1991?Yugoslavia

Who is the first person to reach the North Pole? Robert Peary

Who is the first person to reach Mount Everest? Sherpa Tensing, Edmund Hillary

Where would you find the Itaipu Dam? Panama River, South America

In 2008, Online Survey, which of the following is not one of the New Seven Wonders Petronas Twin Towers

What is the capital of Estonia?  Tallinn

What is the type of government of Denmark? Constitutional Democracy

Where is the official home of Santa Claus?  Finland

The largest dam in the world is located in? South America

What is the largest country in the world in terms of land area? Russia

the country of Singapore is made up of how many islands? 6

Adding and subtracting with debits and credits

Debits and credits affect the accounts differently. some accounts are increased by debits. while others are increased by credits. see how debits and credits affect accounts.

Asset

• Increases - Debit Entry impact 
• Decreases-Credit Entry Impact

Equity     

• Decreases- Debit Entry impact                              
• Increases-  Credit Entry Impact

Liability 

• Decreases-Debit Entry impact
• Increases- Credit Entry Impact

Revenue                               

• Decreases-Debit Entry impact                           
• Increases- Credit Entry Impact

Expense                               

• Increases- Debit Entry impact                              
• Decreases-Credit Entry Impact

Final Accounts

Final Accounts include trading and profit and loss account or revenue account, balance sheet, statement of changes in equity, cash flow statement, and other statements and notes related to above. you should understand that the trial balance is prepared by copying balances from ledger accounts and it is from the ledger account balances we should prepare the trading and profit and loss account and balance sheet and nothing to do with books of prime entry. the purpose of preparing the trading and profit and loss account is to ascertain whether the business made a profit or loss after doing business for a certain period. here there is a tie period. you can prepare the above revenue account for

Useful International Business Word

• Foreign Capital  
• Foreign Companies 
• Foreign Competitors 
• Foreign Consumers  
• Foreign Control 
• Foreign Customs