Unit 1 - Bookkeeping Glossary 1
1. Assets- Is an economic resource. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset.
2. Liabilities- An obligation that legally binds an individual or company to settle a debt
3. Capital- The net worth of a business, that is, the amount by which assets exceed its liabilities
4. Income - The monetary payment received for goods and services
5. Expenses- Money spent or cost incurred in an organization's effort to generate revenue
6. Fixed assets- A fixed asset is an item with a useful life greater than one reporting period which exceeds an entity's minimum capitalization limit .
7. Current assets- is any asset reasonably expected to be sold, consumed or exhausted through the normal operations of a business within the current fiscal year
9. Debit - Under the double entry system every business transaction is recorded in at least two accounts. One side will receive the debit entry, meaning recorded on the left side of the account
10. Credit- Another account will receive a credit entry meaning the amount recorded on the right side of the account
11. Fixtures - Any item bolted to the floors or walls
12. Fittings- Any item that is free standing
13. Stock- The goods or merchandise kept on the premises of a shop or warehouse available for sale or distribution.
14. Debtors -A company or individual who owes money
15. Bank balances- Amount standing to the credit of a depositor
16. Cash in hand- Asset in the form of cash
17. Long term liabilities- Obligations of a company that become due more than one year into the future
18. Current liabilities- All liabilities that become due within one year
19. Creditors- A person or firm to whom money is due
20. Bank overdrafts- An overdraft occurs when money is withdrawn from the bank and the balance goes below zero
21. Accrued expenses- An expense which has been incurred but not yet paid
22. Mortgages- is used to purchase real property to raise money to buy the property to be purchases or by existing property owners to raise funds for any purpose
23. Debentures- A long term security yielding a fixed rate of interest issued by a company and secured against assets.