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Unit 1- 2

Account: an exact record of the money that a company has received and the money it has
spent

Account payable: a bill, debt, etc that is payable must be paid

Account receivable: money owed by customers (individuals or corporations) to another entity


in exchange for goods or services that have been delivered or used, but not yet paid for

Accrued liability: an expense that a business has incurred but has not yet paid

Asset: a resource with economic value that an individual, corporation or country owns controls
with the expectation that it will provide future benefit

Cash: money in the form of coins or notes rather than cheques, credit cards, etc.

Common stock: a security that represents ownership in a corporation

Credit: an entry made in account ledgers to record changes in value resulting from business
transactions. V: to enter an amount on the right side of an account

Debit: an entry made in account ledgers to records changes in value resulting from business
transaction. V. to enter an amount on the left side of the account

Dividend: a part of a company’s profit that is divided among the people with shares in the
company

Equipment: is a noncurrent or long-term asset account which reports the cost of the
equipment

Expenses: costs that are matched with revenues on the income statement

Fixtures and fittings: generally a fixture is understood to be any item that is bolted to the floor
or walls, and fitting to be any item that is free standing or hung by a nail or hook

Furniture: large objects such as chairs, tables, beds, and cupboards

Inventory: a current asset whose ending balance should report the cost of a merchandiser’s
products awaiting to be sold

Liability: an obligation, all the accounts payable

Note payable: the amount of principal due on a formal written promise to pay

Note receivable: an asset of a company, bank or other organization that holds a written
promissory note from another party

Prepaid expense: future expense that has been paid in advance

Retained earnings: the corporation’s cumulative earning that have not been distributed to its
stockholders

Stockholder equity: owners of a corporation are called stockholders (or shareholders),


because they own (or hold) shares of the company’s stock. Stock certificates are paper
evidence of ownership in a corporation

Transaction: event that effects a change in the asset, liability, or worth account
Unit 3 – 4

Booking deposit: an expression of intention usually provided to the auctioneer at the time an
offer for the purchase of a property is made

Cash register: a machine used in shop to keep the money in and record the amount of money
received form each sale

Cash shortage and overage: situation in which the physical amount of cash on hand differs
from the book recorded amount of cash

Counterfeit money: fake money

Deposit: an amount of money that is paid into a bank account

Dual control: actions requiting approval by two persons, each being held accountable

Endorse: transfer ownership of an asset by singing the back of a negotiable instrument

Expenditure: payment of cash or property, or the incurrence of a liability to obtain an asset or


service

Payment: an amount of money that has been or must be paid

Petty cash: relatively small amount of cash kept at hand for making immediate payments for
miscellaneous small expenses

Receipt: a piece of paper that you are given which shows that you have paid for something

Reconciliation: adjusting the difference between two items (amounts, balances, accounts, or
statements) so that the figures agree

Unit 5 – 6

Collect: to get money that you are owed

Debt: a sum of money that a person or organization owes

Dishonor: to refuse to pay, as in the case of a check that is returned by a bank because of
insufficient funds

Interest: amount charged by a lender to a borrower for the use of funds

Maturity: due date of a debt at which time the principal must be paid

Payable: amount owed to another party

Promissory note: formal unconditional promise in writing to pay on demand or at a future


date a definite sum of money

Receivable: amount due the company on account from customers who have bought
merchandise or received services

Unit 7 – 8

Capital: equity interest of the owner in the business that is the difference between asset and
liability, also called equity or net worth

Capital account: general ledger account describing owners’ equity in a business


Corporation: business organized as a separate legal entity with ownership evidenced by shares
of stock

Day to day operation: the activities that a business and its employees engage in on a daily
basis for the purposes of generating a profit and increasing the inherent value of the business
as a going concern

Drawing account: provision allowing a personal withdrawal of cash or other assets from a
proprietorship by the owner.

Entity: separate economic unit subject to financial measurement for accounting purposes

Equity: any right to assets, property right, a liability. An equity holder may be a creditor,
stockholder or proprietor.

Income summary account: temporary account in which revenues and expenses are closed at
the end of the year

Joint venture: joining together of two or more business entities or persons in order to
undertake a specific business venture

Paid in capital: section of stockholders’ equity that shows: 1. Amount of sock a corporation has
issued, 2. the premiums or discounts that have resulted from selling stocks (paid in capital in
excess of par or stated value), 3. Stock received from donations, 4. The resale of treasury stock

Partner: a member of a partnership, which may be a syndicate, association, pool, joint


venture, or other unincorporated organization

Partnership: form of business organization created by an a agreement between two or more


persons who contribute capital and/or their services to the organization

Proprietorship: unincorporated business owned by a single person and sometimes called a


proprietorship

Retained earnings: accumulated earnings of a corporation since inception less dividends.

Share: one unit of ownership interest in a company, mutual fund, limited partnership, etc.

Sole proprietorship: ownership of a business, with no formal entity as a vehicle or structure

Unit 9 – 10

Current asset: item having a life one year or less, or the normal operating cycle of the
business, whichever is greater.

Fair value: the proce that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

Fixed asset: item that has physical substance and a life in excess of one year.

Goodwill: the value of the company’s name and reputation, its customer relations, and other
factor that, although intangible, give a concern its competitive edge and produce better-than-
typical future earnings.

IAS: international accounting standards


IAS 16: international accounting standards an IFRS adopted by the international accounting
standards board (IASB). It concerns accounting for property, plant and equipment (known
more generally as fixed assets), including recognition, determination of their carrying amounts,
and the depreciation charges and impairment losses to be recognized in relation to them.

ISFR: international financial reporting standards

Impairment loss: the amount by which the carrying amount of an asset exceeds its recoverable
amount.

Intangible asset: item lacking physical substance or representing a right granted by the
government or by another company

Noncurrent asset: asset not expected to be converted into cash, sol or exchanged within the
normal operating cycle of the firm, usually one year.

PP&E: property, plant, equipment, also known as fixed assets.

Residual amount: the estimated amount that an entity would currently obtain from disposal if
the asset were already of the age and in the condition expected at the end of its useful life.

Tangible asset: one having physical substance and a life greater than one year.

Useful life: typical operating service life of an asset for the purpose it was acquired