Sie sind auf Seite 1von 6


Accounting: Better judgment, the art of recording, classifying and summarizing the business
transaction or financial information, better judgments and decisions concerning a business.
Accounting is concerned with collecting, analyzing and communicating financial information.
 Develop new product & services
 Increase & decrease price and quantity
 Increase & decrease purchasing, production, distribution
 Increase & decrease operating capacity
Assets: Properties owned by a business enterprise.
Accounting Terms & Concepts 23: Sales, Purchase, A/R, A/P, Assets, Liabilities, Balance Sheet,
Ledger, Revenue, Expenses.
Accounting Principles: 1. Accounting concept 2: Accounting conversion
Accounting Concept 8: Cost concept, realization concept, going concept, matching concept.
Accounting Conversion 4: Full discloser, consistency.
Amortization: The decrease in the intangible assets, such patent, goodwill, copyright.
Adjustment: A correct record of transaction which has not been recorded or which has been
1.Outstanding Expenses (Liabilities) + 2.Prepaid Expenses (Assets) _
 Payable Expenses  Unexpired Expenses
 Accrued Expenses  Expired Expenses
 Paid Expenses  Expenses paid in advance
 Unpaid Expenses  Supplies
 Expenses but not yet paid
 Accumulated
3.Earned Income (Liabilities) + 4.Unearned Income (Assets) _
 Receivable Income  Pre received Income
 Accrued Income  Income received Advance
 Income due but not yet receive

Account: A summary of transaction relating to a person or thing.

A/R - Sundry Debtors: The account in which the credit sales of merchandise or services are
A/P-Sundry Creditor: The account in which credit purchases of goods or service placed.
Accounting Equation: Assets =Liabilities + Owner’s equity
Acquisition: A corporate action in which a company buys most, if not all, of the target company's
ownership stakes in order to assume control of the target firm.


Actual cost is the cost incurred (a historical cost) as distinguished from budgeted costs.
Aim: Point or direct at a target.
Abnormal Loss: Due to fire, flood, recorded in books of accounts.
Auditing: A systematic process of objectively obtaining and evaluating evidence regarding
assertions and communicating the results to interested users.
Bank: An institution, which purchases and sells money and transacts other financial business of
likes nature.
Business: Profit making organization. CSR welfare of the society. Any activity undertaken for the
purpose of earning profit.
Business plan is a written narrative, typically 25 to 35 pages long, that describes what a new
business plans to accomplish.
Bonds (serial): Debt investment. A bond issue that matures in installments.
Bad debt: An account or note receivable that proves to be entirely or partially uncollectible.
Book keeping: The systematic recording of the business transaction of an enterprise.
Business Transaction: Any dealing between two or more persons for the business purpose.
Balance Sheet: Following disclose the financial position of the business.
Balancing: The process of equalizing the two sides of an account.
Breakeven Point: The level of output volume for which total cost equal total revenue. The
company earns no profit/no loss.
Budget: Estimate of income and expenditure for asset of period of time.
Budgeting: Financial planning.
Bank Reconciliation Statement: Depositor record, find out mistake pass book & cash book.
Corporation: An entity created by law.
Contra Entry: Both sides of cash book, double column cash book.
Creditor: Receiver the money, a persons from who credit purchaser are made. A lender or holder
of debt.
Capital: Investment, cash and goods invested by the proprietor while starting his business.
Capital expenditure the cost of a betterment to a property.
Consignment: A transfer of property without a transfer of title and risk of ownership. The recipient
of the property (consignee) acts as a selling agent on behalf of the owner (consignor).
Contingent Assets: Assets come into existence upon happening of certain events.
Current Assets: Stock on trade/expected be converted into cash within 1 year or less.
COMMON STOCK is a security that represents ownership in a corporation.
Cash: The most liquid assets including negotiable checks and unrestricted balance in checking a/c.
Cash flow: Statement that shows a company’s flow of cash over a certain period of time. Uses of
Funds, Sources of Funds.
Cost is a resource sacrificed or forgone to achieve a specific objective.
Cost Accounting: Product cost information, internal & external users. Determine products costs
and help with marketing decisions.
Cost object is anything for which a separate measurement of costs is desired.
COMMERCE: The conduct of trade amongst economic agents. Generally, COMMERCE refers
to the exchange of goods, services or something of value, between businesses or entities.
Conversion Cost: Direct Labor + Factory Overhead
Debtors: Pay the money. A persons to whom the goods or services are sold on credit basis.


Drawings: Cash are goods taken away by the proprietor for personal use.
Double Entry System: Two sides every transaction, journal, ledger, trial balance, final account.
Depletion: The decrease in the value of proportionate to the quantum of production, oil, forest.
Dividends: Periodic distribution of cash to the stockholders of a firm.
Direct Expenses: The expenses which are directly related to purchase and production, wages,
freight, carriage, inward.
Dividend: The amount of profit which distributed to the stakeholder. Dividend allot three
method (cash, stock, shares).
Depreciation shows that an asset such as equipment or a building is wearing out and being used
Damping: Selling goods in a foreign market for less than cost production are below that “fair
market value”.
Direct Materials: Materials that become part of the finished good and can be readily identified.
Direct Labor: Labor of employees who work directly on the product manufactured.
Discount: When the bond sells for less than the par value.
Entrepreneurship: New business idea, is the art of turning an idea into a business.
E Commerce is important in the commercial market today.
E-finance: A new means of delivering financial services electronically.
Efficiency: Doing things right, or getting the most output from the least amount of inputs.
Effectiveness: Doing the right things or completing activities so that organizational goals are
Financial Statement: Prepared to show the financial position. Income statement & Balance sheet.
Fixed Assets: All assets held in business for permanent use.
Finance: Better decision, like accounting, finance available, cost and benefits, risk association,
financial markets. The science and art of managing money. Managing the money and managing the
investment. Financing and investing activities of the business.
Financial Non-Financial
 Cost direct  Inefficiency
 Indirect breakeven  Breakeven increase

External Liabilities: All debts payable by a business to the outsider.

Expenses: Outgoing assets, incurred.
Equity the value of the shares issued by a company.
Economics is the study of how society manages its scarce resources.
Final Account: Finally prepared usually at the end of the accounting period to ascertain profit and
loss a/c and the financial position of the business.
Financial accounting provides external users with financial statements. Advance accounting
shareholders, lenders, governments, customers.
Factory overhead: Includes all costs related to production other than direct materials and direct
Goal: Aim or desired results.
General Domestic Product (GDP): Measure to country economy.
Horizontal Analysis: A comparison financial statement items over a period of time.
Liabilities: Debts or obligation of the business.


Ledger: The in which all business transaction are finally recorded in a summarized and classified
Internal Liabilities: The total amount if the debts payable by business to its owners.
Intangible Assets: Assets, which have not physical existence, goodwill, copyrights, patents.
Indirect Expenses: All these expenses other than direct expenses, rent, salaries, legal charges.
Income: Incoming assets, earned.
Invoice: A document given by the seller to the buyer for credit sales goods.
Investment: An INVESTMENT is the purchase of goods that are not consumed today but are
used in the future to create wealth.
Insurance: Protection of financial losses, risk management. A contract that provides
indemnification from specific losses in exchange for a periodic payment. The individual contract
is known as an insurance policy, and the periodic payment is known as an insurance premium.
Income Statement: Expenses & Revenue = Income statement. Statement which is prepared
ascertains the net income or net loss of the business a specific accounting period.
Inventory: The raw materials, work-in-process goods and completely finished goods that are
considered to be the portion of a business's assets that are ready or will be ready for sale.
Interest Rate: A rate which is charged or paid for the use of money.
Revenues - recorded in the period in which they are earned.
Journalizing: The act of recording transaction in the journal.
Journal: The books of account in which business transaction are originally recorded in
chorological order.
Leasing (Ijara): The process by which a firm can obtain the use of certain fixed assets for which
it must make a series of contractual, periodic and tax-deductible payment.
Lessee: The receiver of the services of the assets under a lease contract.
Lessor: The owner of the assets that are being leased.
Listed Company: A company which is listening on different stock exchanges inside country or
outside country and their shares on stock exchanges.
Logic may be defined as the science of reasoning.
Liner programmed: Mathematical technique, resource constraint theory, resource face theory.
Three components 1 decision variables 2 objective function 3 a set of constraint.
Micro Finance: Credit services, financial services.
Microeconomics: Decisions of individual units, No matter how large.
Macroeconomics: Behavior of entire economies, No matter how small.
Merger: The combining of two or more companies, generally by offering the stockholders of one
company securities in the acquiring company in exchange for the surrender of their stock.
Merchandise: Goods purchased for resale.
Managerial accounting provides information needs for internal decision makers. Managers,
Officers, Controllers, Controllers.
Marketable Securities: A firm holds m/s to earn on a return near cash resources.
Manager A person who directs resources to achieve a stated goal.
Management Strategic thinking, job performances, profitability. The process of work completed
to other people achieve organizational goals and objectives with affectivity.
Management: Act, art, or manner of handling, controlling, directing, etc.
Marketing is the delivery of customer satisfaction at a profit.


Marketing Budgets, marketing research, marketing financial products.

Mission: A statement of the purpose an organization.
Mission Statement: An official statement of the aims or objectives of a business.
Narration: Written explanation below each journal entry.
Nominal A/c: Expenses & losses, commission, salary.
Normal Loss: Handling of goods, breakage, not recorded in books of accounts.
Operating income: The income earned on a bank’s ongoing operations.
Operating expenses: The expenses incurred from a bank’s ongoing operations.
Organization: A deliberate arrangement of people to accomplish some specific purpose.
Operations management (OM) is the set of activities that create value in the form of goods and
services by transforming inputs into outputs.
Opportunity is a favorable set of conditions that creates a need for a new product, service or
Ownership the act, state, or right of possessing something.
Owners’ Equity: The right possess by the owner against the assets of the business.
Objective: A thing aimed at sought a goal.
Outsourcing: Refers to the transfer of activities that traditionally have been performed internal to
external provides, activities performed by expert.
Proprietor: The owner of the business.
Purchases Return: Goods returned to the supplier.
Per Capital Income: Total national income/total population
Purchase: Goods are purchased.
Production is the creation of goods and services.
Posting: Process of transferring the transaction from journal into appropriate accounts in the ledger.
Preferred Stock: Special form of ownership, distribution of the dividend to stockholder.
Partnership: A business owned by two or more people and operated for profit.
Prospectus: A portion of a security registration statement that is filed with the Securities and
Exchange Commission and made available to potential purchasers of the security.
Portfolio: A collection, or group, of assets.
Private Company: Formed by at least two member, maximum member, restriction.
Public Company: Formed by at least seven member, maximum member, no restriction.
Plan: Detailed proposal for doing and achieving something.
Personal A/c: Debtor & creditor cash, UBL a/c, Ali a/c.
Product Cost: Manufacturing
Period Cost: Selling
Prime Cost: Direct Materials + Direct Labor
Quality: Degree of excellence a product or service provides
Inventory: The raw material, work in process, and completely finished goods that are considered
to be the portion of business assets that are ready or will be ready for sale.
Retained earnings: Distribution of the dividend to shareholder, (sometimes plowback) refers to
the portion of net income of a corporation that is retained by the corporation (plowed back) rather
than distributed to shareholders as dividends (paid out).
Real A/c: Building, Fixed assets.
Single Entry System: Day book, cash book, journal.


Sales Return: Goods returned by the customers.

Sole proprietorship: A business owned by one person and operated for his or her own profits.
Shares: Equity investment.
Sales: Goods are sold.
Strategy: A plan of action or policy designed to achieve a major or overall aim.
Strategic management is a set of managerial decisions and actions that determines the long-run
performance of a corporation.
Standard Cost: Product = material, labor, factory overhead
Tangible Assets: Assets, which have physical existence.
Trade Discount: Discount deducted from the list price.
Total Made up of the whole.
Tactics: Carefully planned to achieve specific end.
Target: An objective attention to attack.
Treasury Stock: When company purchase it’s on shares, goodwill increase, less in retained
Transaction: A business event which can be measured in terms of money and which must be
recorded in books of account.
Transaction: Business deal, any dealing between two or more person.
Total quality management (TQM) is the integration of all functions and processes within an
organization in order to achieve continuous improvement of the quality of goods and services. The
goal is customer satisfaction.
Trial Balance: Arithmetical accuracy of the books account.
Unlisted Company: A company whose shares are not available to general public for trading and
not listed exchanges (public or private limited company).
Voucher: Any written evidence in support of a business transaction.
Vertical Analysis: A comparison financial statement items single a period of time, common size
Working Capital: The excess of the current assets over the current liabilities.
Work Sheet: A convenient systematic form, all the accounting data, required at the end of the
period, it is not a permanent record but it is working paper of accountant (facilitate to the financial
World Trade Organization (WTO): The organization that monitors rules for the conduct of trade
between countries (tariffs and quotas).
World Bank: The International Bank for Reconstruction and Development, an international
organization that provides long-term loans to assist developing countries in building dams, roads,
and other physical capital that would contribute to their economic development.