1.
**Event**
An event is any occurrence, internal or external, that has a financial
impact on a business and can be measured and recorded in monetary
terms in the accounting records.
2. **Transaction**
A transaction is a financial activity involving the exchange of goods,
services, or money, affecting the financial position of a business and
recorded systematically in the books of accounts.
3. **Vouchers**
Vouchers are written documents that serve as evidence for business
transactions. They support accounting entries and include bills, receipts,
invoices, or any authorized paper validating financial dealings.
4. **Capital**
Capital is the amount invested by the owner into the business. It
represents the owner’s equity in the firm and is shown as a liability from
the business’s perspective.
5. **Assets**
Assets are valuable resources owned by a business, including cash,
inventory, machinery, and buildings, which help generate future economic
benefits and are classified as current or non-current assets.
6. **Liabilities**
Liabilities are financial obligations the business owes to external parties,
such as loans, creditors, or outstanding expenses, which must be settled
over time through transfer of assets or services.
7. **Trade Debtors**
Trade debtors are customers who owe money to the business for goods
or services sold on credit. They are considered current assets expected to
be paid within the business cycle.
8. **Trade Creditors**
Trade creditors are suppliers from whom goods or services are bought
on credit. The business owes them money, and they are listed as current
liabilities in the balance sheet.
9. **Purchases**
Purchases are the total cost of goods bought by a business for resale or
production during an accounting period. It includes both cash and credit
acquisitions of inventory.
10. **Sales**
Sales are the total revenue earned from selling goods or services to
customers. It includes cash and credit sales and is the primary source of
business income.
11. **Goods Traded In**
Goods traded in are items regularly bought and sold by a business as
part of its core operations. They are the main focus of purchase and sales
activities.
12. **Profit**
Profit is the financial gain earned when total revenue exceeds total
expenses during a specific period. It increases owner’s equity and
indicates the business’s success and operational efficiency.
13. **Loss**
Loss occurs when a business’s total expenses exceed its total revenues
during a period. It reduces the owner’s capital and signals financial
inefficiency or operational problems.
14. **Expense**
Expenses are the costs incurred in running a business, such as rent,
wages, and utilities. They are deducted from revenue to determine profit
or loss during the period.
15. **Revenue**
Revenue is the total amount earned by a business through normal
operations like sales of goods or services, interest, or fees, before
deducting any associated expenses or costs.
16. **Income**
Income refers to the net earnings of a business after deducting all
expenses from revenue. It reflects the profitability and overall financial
performance during an accounting period.
17. **Drawings**
Drawings are withdrawals made by the owner from the business for
personal use. These reduce the owner’s capital but are not considered a
business expense.
