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