Page 3 - LN

Expense:-It is known as cost of assets consumed or services which used.

Expenditure:-It means spending money for some benefit.

Profit: - Excess of revenues over expenses is called profit.

Gain: - It generates from incidental transaction such as sales of fixed asset, winning of court case.

Loss: - Excess of expenses over income is termed as loss.

Discount:-It is defined as concession or deduction in price of goods sold.

Voucher:-It is known as evidence in support of a transaction.

Goods: - It refers all the tangible goods (Raw material, work in progress, finished goods.)

Drawings: - Amount of goods or cash which is withdrawn from business for personal use.

Purchases: - It means of procurement of goods on credit or cash.

Stock: - It is a part of unsold goods. It can be divided into two categories.

1.Opening stock

2. Closing stock.

Balance Sheet : Balance Sheet is prepared at the end of each accounting period to ascertain the
financial position of the business.

Proforma of Balance Sheet

Liabilities Amount Assets Amount

Capital … Land ….
Creditors …. Building ….
Bills Payable …. Furniture ….
Outstanding Expense … Machinery ….
Loans … Stock ….
Bills Receivable ….
Debtors ….

…. ….

Capital expenditure:
“Outlay resulting in the increase or acquisition of an asset or increase in the earning capacity of
the business are capital expenses”. William pickles