Accounting Terminology

Accounting the most integral part of every organization, whether it is a company, a small firm, MNC, showroom, shop etc. All the expenses, sale, purchase, inventory is to be managed through accounting.

Accounting is basically a process of maintaining the records relating to company finances.  All the records are maintained with the help of an accounting software called “Tally ERP9”.

Tally ERP9 is the most used software in India and one can easily learn to operate it and maintain the records on regular basis by joining Tally Training Institute in Chandigarh.

So, this shows that without having a knowledge of Tally, one cannot get ahead in the field of accounting.

Here we are about to share few accounting terminology and terms with you to make your concepts more clear :

Bookkeeping : Bookkeeping is a process of keeping the records maintaining the same of all the financial transactions  of the organization.

Capital : Capital is the amount of money invested by the businessman to start a new business.

Credit : Credit is an entry in accounts which shows the increase in account balance of the company or reduction in assets of the company .

Debit : It in entry opposite to credit, which shows decrease in the account balance of the company or increase in assets of the company.

Creditor : Creditor is the person who owes money from the company/ person to whom he has sold his goods or provided his services.

For Example : If you sold your  goods to a Company A on credit then you are the creditor and this company becomes liable to pay you in a given time frame.

Debtor : Debtor is a person who has to give money to the person or a company from whom goods are purchased .

For example: If you purchase a particular quantity of goods from a company then you become the debtor. Basically debtor in simpler words is a customer who buys goods on credit.

Ledger : Ledger is a the complete accounting record of every transaction and that so datewise. All the financial statements are prepared with the help of these ledgers.

Sale : Sale in terms of accounting means to sell the goods in the inventory of the company. This reduces the inventory but increases the gross profit of the company.

Sale return : Sale return is also called return inward.This happens in case the goods sold by a company are returned in account of bad quality or some other fault and this increase company’s inventory.

Assets: Assets are the company resources which are purchased by the company in order to use the same for the business development. Everything being used for company benefits is an  asset for the company. This includes machinery, company vehicles, live stock, company land, building, it’s furniture, brand names, patents, Cash, inventory, and the most important asset Employees.

These basic term may help you to grasp those basic concepts of accounting in your early stages of learning in Tally training institute in Chandigarh.