• Accountability:  Obligation to account for, and report upon the discharge of responsibility and/or use of authority.
    Accountant:  A professional who is responsible for the processing of financial data for the purpose of the firm.
    Accounting: is the art of recording, classifying and summarising in a significant manner and in terms of money, transactions and events which are at least of financial
     character and interpreting the results thereof.
    Amortisation: 1)The process of repayment of the principle loan amount, on maturity in lumpsum or in instalments.2) The process of writing down long term investments
     in intangible assets like patent, copyrights etc.
    Application of funds: Use of additional working capital and includes amounts lost in operations (operating loss), acquisition of fixed assets, working capital used for
     retiring long-term loans, payment of dividends and amounts utilised to increase working capital.
    Appreciation: An increase in the value of any asset.
    Articles of Association: The legal constitution of a joint-stock company. It contains rules and regulations for management of its internal affairs.
    Asset:  Any item that has a monetary value. Assets are divided into tangible and intangible assets or fixed assets and current assets.
    Audit: It is the process of ascertaining whether the administer has spent or is spending his funds in accordance with the terms of the legislative instruments which
     appropriated the money has been spent, it is occurs after the money has been spent, it is called post audit.
    Bad debt: It is a debt that will never be paid, perhaps because the debtor has been declared bankrupt. 
    Balance Sheet: It is a statement of accounts of a firm’s total assets and total liabilities at a given moment of time. It is the last part of final account and it is prepared with
     the balances of accounts left after the preparation of Trading and Profit & Loss account.
    Balancing of Accounts: The procedure of finding out the difference between debit side and credit side of an account is called balancing.
    Bank Money: Cheque Currency
    Bank Rate: The interest rate charged by the Reserve bank when lending to commercial banks.  A hike in the bank rate tends to cut down on money supply and a reduction
     in the bank rate tends to increase money supply.
    Bank Statement: A statement furnished over a period of time, showing an individual or business’ transactions with a bank.
    Bank: Any entity authorised by the Reserve Bank of India to accept deposits.
    Bankrupt: When a firm is unable to pay its creditors and assets of the firm are distributed among creditors.
    Bill of Exchange: A financial security used to extend credit by one business to another for a short period of time.
    Bill of Lading: A document which specifies details of goods shipped, the ship on which the goods have been loaded, and the names of the consignor and consignee.
    Bill: 1) An invoice furnished as a request for payment.  2) A draft legislation that is submitted to parliament.  3) a financial instrument used by a firm or the government to
    borrow money.
    Bills Payable book: It is used for the purpose of recording the details of bills payable issued by the creditors.
    Bills Receivable book: It is used for the purpose of recording the details of bills received from debtors.
    Bond: A financial security used by a business or the government to borrow money on a long-term basis.
    Bonus Shares: shares which are issued by a company free of charge to its existing shareholders in proportion to the shares held by them.  Bonus shares are issued when a company wished to increase its capital by using its retained profits (or free reserves) and feels that its existing share capital does not give a true picture of the amount of capital employed in the firm.
    Book Value: The value of assets in the balance sheet of a firm.
    Business transaction: It is a transaction which involves the transfer of money or money’s worth between two parties.
    Buyer : A  purchaser of goods and services.
    Capital goods: Durable goods like plant, machinery and equipment.
    Capital: When a venture is started with a particular amount, it is called its Capital. The difference between assets and liabilities of the business is also termed as capital.
    Cash book: It is one of the subdivisions of journal to enter the receipts and payments of cash transactions. It is a book if original as well as secondary entry. It is
    considered to be the book of original entry since cash transactions are primarily recorded here. It is also a ledger account, having debit and credit sides. No separate cash account need be opened in the ledger. In cash book separate columns may be provided to enter bank and discount entries.
    Cash Discount: It is given by the seller to the buyer for prompt payments.  Cash discount is a selling expense for the seller and an income for the buyer.
    Cash Reserve Ratio (CRR): The ratio of cash required to be maintained from time to time with the RBI by the banks against their total net demand and time liabilities
    (deposits).
    Consumer Goods: Goods bought by consumers for final consumption.
    Cost: The amount of expenditure (actual or notional) incurred on or attributable to a given thing.
    Credit Card: It is a facility given by a banker to a customer. It enables the customers to make purchases on credit basis from shops and other establishments who have
    agreed to participate in the scheme.  Here a maximum limit has been set by the banker.
    Credit Note: It is a note informing the receiver that the receiver’s account is credited by the sender with the amount mentioned in it. When the businessman accepts the
    sales returns or for giving discounts subsequent to the sales he issues a Credit Note crediting the accounts of the customer. 
    Credit terms: the terms extended by a firm to its debtors for payment.
    Creditor: An individual or firm to which money is owed.
    Current Account: 1) An account with a commercial bank into which deposits can be made and sums withdrawn without prior notice.  2) the balance of trade and the
     invisible account.
    Current Assets: All of the assets held by a firm with the objective of conversion to cash within the operating cycle or within one year whichever is longer.  Include items
     such as cash, cash at bank, receivables (sundry debtors), inventory (stock) and prepayments.
    Current Liabilities: All those claims against assets of the firm to be met out of cash or other current assets within one year or within the operating cycle, whichever is
     longer. Include items such as accounts payable (sundry creditors), tax or other claims payable and accrued expenses.
    Current ratio: the relationship between current assets and current liabilities.
    Customs Duty: An indirect tax (import duty) levied on import items.
    Debit Note: It is a note informing the receiver that the receiver’s account is debited by the sender with the amount mentioned in it. Normally Debit notes are prepared
     by the purchaser of goods for the value of materials returned to the supplier or by a seller to the buyer for the delayed payment charges (DPC) for the delay in receipt of
     payment.
    Debt: An amount of money owed.
    Debtors: Persons who owe the business certain amounts are called Debtors.  This takes place when goods and services are sold on credit.
    Depletion: It measures the exhaustion of natural resources e.g. deposits in mines, oil wells, quarries etc. 
    Depreciation: A reduction in the value of an asset during its working life due to several factors like wear and tear, passage of time, obsolescence etc.
    Discount: It is the deduction allowed on the selling price of commodities and services or on the amount due by debtors. Discount allowed is an expense to the creditor
     and discount received is an income to the debtor.
    Dividend: Interest paid on capital. Payment made by a joint-stock company to shareholders for providing share capital.
    Double Entry Book Keeping: The system of keeping account by which the two aspects of a transaction are recorded is called double entry book keeping. It was first
     described by the Italian mathematician Luca Pacioli. This system is called double-entry because each transaction is recorded in at least two accounts- one debit and one credit.
    Drawings: It is the amount of cash or other assets withdrawn by the owner for his personal use.
    Effective interest rate: Interest rate payable on the purchase price of a bond.
    Expenditure: Spending on products and assets. Amount spent for the acquisition of fixed assets whose benefit will be derived within a long period of time is called
    capital expenditure and amount spent for day to day expenses such as salary, wages, postage etc. are called revenue expenditure.
    Expense: Amount spent for earning of revenue is called expenses. Salary,  rent etc. 
    Face Value: Nominal value. 
    Final Products: The goods and services consumed by end-users and not used as inputs in a process of production.
    Finance: The life blood of business.
    Financial Management: is an activity concerned with planning and controlling of the firm’s financial resources to generate returns on its invested funds to achieve the
    objectives of the firm.
    Firm: An economic unit that uses factor inputs in the production process to generate outputs. In legal terms, firms can be sole proprietorships, partnerships or
     joint-stock companies.
    Fiscal Deficit: indicates the excess of total expenditure of the government over its total receipts. 
    Fixed Asset: Tangible long-lived asset. Usually having a life of more than one year. Includes items such as land, building, plant, machinery, motor vehicles, furnitures and
     fixtures.
    Fixed Cost: The cost which remains fixed irrespective of the quantum of output over a certain capacity of the organisation.
    Freehold Property: Property that is legally owned outright.
    Gain: Generation of income through sale of assets is termed as gain.
    Goods: Tangible economic products that directly or indirectly lead to the satisfaction of human wants.  Also known as commodities.
    Gross Profit: Sales revenue minus cost of goods sold.
    Hire Purchase: A system of consumer purchases through the provision of credit by the supplier. The consumer pays an initial deposit and pays the remaining purchase
    price and an interest component through instalments.
    Historic Cost: Original cost of purchasing an asset.
    Holding Company: A company that controls another company or group of companies by holding a majority of shares of the subsidiaries.
    Import duty (Customs duty): A tax levied by the government on imports.
    Imprest System:  As per this system a fixed sum of money is given to the petty cashier for the requirement of a particular period. The fixed sum with the petty cashier at
     the beginning is called ‘Imprest’ or ‘Cash float’ and this system is known as ‘Imprest System.’
    Income Tax: A direct tax imposed on  income of households.
    Income: It is the increase in the net worth of the organization either from business activity or other activities.
    Indirect Materials: Materials which are not incorporated in a final product, but are consumed in the production process.
    Indirect Taxes: Taxes imposed on an entity at some point in the chain from production of goods to their distribution, Ex. Customs duty, Excise duty and Sales tax.  Since
     the burden of the tax can be passed on to others, the impact and incidence of tax is not on the same person.
    Insolvency (Bankrupt): Condition where an individual or firm’s liabilities to creditors exceeds assets and the firm or the individual can not discharge accumulated
     liabilities from realisable assets.
    Insurance: A method of protecting an individual or a firm against financial loss that results from damage and theft, affecting assets or even death and injury.  The term
     `assurance’ is used to mean some types of life insurance.
    Intangible Assets: Non-physical assets like goodwill, patents, franchises, formation expenses and copyrights.
    Interest: A charge paid for borrowing money.
    Inventory turnover: number of times the average inventory has been sold during a period.
    Inventory: Stocks of finished goods, work in progress and raw materials held by a business.
    Invoice: The document  issued by the seller to the buyer with required details of transaction.
    Journal Proper: Journal proper or General journal is used to enter transactions like opening entries, closing entries, adjustment entries, transfer entries, rectification
     entries, etc. which can not be recorded in other specialised journals.
    Journal: It is the book of primary entry. Whenever any transaction or events occurs it is recorded in the first instance in the journal. Purchase day book, Sales day book,
     Purchase returns book, Sales returns book, Cash book and Journal proper are various types of Journal.
    Leasing: implies the transfer of the right to use an asset to a person or company for a specified period.
    Ledger Posting: The process of transferring journal entries into ledger is called posting.
    Ledger: It is a collection of all the accounts debited or credited in journal.
    Liability: Any amount owed by one person (the debtor) to another (the creditor).  In a balance sheet all those claims against the assets of the entity, other than those of
     the owners.
    Liquidation: implied the sale of assets to a person who may use them for the same purpose or some other restrictions imposed by the state.
    Liquidity: The extent to which an asset can be readily converted into currency.
    Management Accounting: Accounting designed to provide information to managers so that they can plan a company’s operation better.
    Marginal Cost: The extra cost that results from increasing output by one unit.
    Market Price: The price that consumers pay for a good or service.
    Marketing: The process of identifying consumer needs and providing them by offering goods and services to satisfy consumer wants.
    Memorandum: A diplomatic document with a factual description of an issue, analysis of some provisions and a justification of  positions.
    Memorandum of Association: The constitution of a company containing certain fundamental matters.  It is a basic document for the existence of the company. 
    Merger: The amalgamation of two firms to form a new firm.
    Money: An asset acceptable as a medium of exchange.
    National Income Account: Net value of all goods and services produced in an economy during one year or a given period.
    Net Current Assets: the aggregate of all current assets less current liabilities.
    Net Investment: Gross investment minus depreciation.
    Net Present Value (NPV): A technique of discounted cash flow for capital expenditure evaluation which seeks to determine whether the present value of the estimated
     future cash inflows at management’s desired rate of return is greater or less than the cost of the proposal. 
    Net total assets: Total assets minus current liabilities
    Opening entry: In the case of a going concern the assets and liabilities on closing date of the previous year will be brought into the books of the current year by means of an opening entry.
    Opportunity Cost: The value of the benefit sacrificed in favour of choosing a particular alternative or action.
    Overdraft: When a customer withdraws more money from a bank than deposited by him, he is said to have overdrawn his account. In normal case cash book(bank column) of the businessman will be debit balance and pass book will be credit balance. In the case of overdraft cash book shows a credit balance and pass book shows a balance.
    Overheads: Costs that are not directly related to a product. Indirect costs like Indirect materials, indirect labour and indirect expenses. 
    Oversubscription: Situation in a new share issue where the number of shares applied for are greater than the number of shares that are to be issued.
    Owner’s Equity: It is the owner’s claim against the assets of a business entity. It could be expressed as total assets of an entity less claims of outsiders or liabilities. 
    Include both contributed capital and retained earnings.
    Packaging: Means of protecting and selling a product. It also has a role to play in the marketing of a product.
    Paid-up Capital: A joint stock company may issue shares on phased payment terms.  The amount of called up capital which shareholders have paid to date is known as
    paid up capital.
    Patents: The grant of temporary monopoly rights and control over new products and processes to the inventor.  Patents are a system of rewarding incentives.
    Pay: Money paid to an employee for work done.
    Payable: It means what the business has to pay to outside parties. When we purchase goods on credit sellers are known as creditors. We accept bills drawn by certain
     creditors, which becomes a part of bills payable. The total of creditors and bills payable is termed as payables.
    Personal Taxes: Taxes imposed on tax payers’ income and borne by individuals / householders.
    Petty Cash book: This is used to enter small payments like cartage and postage by the petty cashier. It is prepared to reduce the size of the cash book and valuable time of cashier. Petty cashier works under the supervision of main cashier who advances a certain amount to him in the beginning of a specified period. Petty cash book is usually maintained under imprest system.
    Planning: It is the process of setting objectives for the future and developing courses and actions to accomplish them.
    Policy: Refers to the objectives or goals which a group sets for itself plus the means adopted toward the postulated goad.
    Preference share: Financial security issued to individuals and institutions who provide long term finance to joint stock companies.
    Premium: 1) Purchase of bonds or shares at more than its nominal value. 2) Actual payment made to an insurance company for a policy.
    Present Value: The amount of money which, if invested immediately at  a stated rate, would yield one or more future payments reflecting the increased value of the
     investment in accordance with the time value of money.  Conversely, it may be considered the value of a future stream of payments discounted at a given rate to the
     present time.
    Price: The money value of goods, service, asset or factor input.
    Private Property: Assets held by individuals as part of personal wealth.
    Private Sector: Part of the economy concerned with the transactions of private individuals, firms and institutions.
    Product: A gereric term that covers goods and services.
    Profession: An occupation, which involves rendering personal services of special and expert nature.  The person has to acquire a specialised degree which is the
    minimum qualification for such an occupation.
    Profit and Loss Account: The final summary of all revenues, gains, expenses and losses during an accounting period. Shows the net profit or loss for the period.
    Profit Margin: Selling price of product minus production and selling costs.
    Profit Sharing: Distribution of some part of the profits amongst the employees of a company.
    Profit: Revenue minus expenses for a given accounting period.  Negative profit is known as loss.
    Promotion: upward movement in present job leading to greater responsibilities, higher status and better salary.
    Provision: Amount set apart from profit and loss account to meet known contingencies like bad debt but the amount for which can not be predetermined is called
    provision.
    Public Debt: National Debt.
    Purchase day book: It is used to record credit purchases of goods. It is also called Purchase book, bought day book, purchases journal, invoice book etc.
    Purchase day book: It is used to record credit purchases of goods. It is also called Purchase book, bought day book, purchases journal, invoice book etc.
    Realisation: Recognition of the revenue in accounting based on the assumption that increase in owners’ equity arises at the point of delivery or provision of goods or
    services.
    Receivables: It means what business has to receive from outside parties on revenue account. When we sell goods on credit, purchasers are known as debtors. Certain
    debtors accept bills drawn by us and become part of bills receivable. The total of bills receivable and debtors is known as receivables.
    Registrar of Companies: Official who maintains a record of all joint stock companies.
    Replacement cost: The cost of replacing an asset at the prevailing market price.
    Reserve: Amount set apart from profit and loss account to meet unforeseen contingencies or eventualities is called Reserves. Reserve created out of Revenue profits are called Revenue reserves and created from capital profits are called capital reserves.
    Retailer: The final stage in the production and distribution chain. A retailer buys goods from wholesaler and sells it to the ultimate consumer, who needs it for
    consumption.
    Revaluation: 1) An increase in the value of the domestic currency as compared to foreign currencies. 2) ……
    Revenue: 1) An income or gain accruing to the business from its day-to-day operations is called revenue income.  2) Assets received from the sale of goods or services to customers.  
    Right issue: A joint stock company may decide to issue additional shares to existing shareholders at a price that is lower than the prevailing market price of the shares.
    Risk-taking: The extend of freedom given in an organisation to experiment with new untried ideas.
    Royalty: Payment made to the owner of an intellectual property right, such as patent, trademark or copyright.
    Salary: Payment made to employees on monthly basis.
    Sales day book: This is used for recording credit sales of goods. This is also known as Sales book or sales journal.
    Sales Ledger: It contains the individual accounts of trade debtors (ie. Persons purchased goods on credit).
    Sales: Income generated from the sale of goods and services. It is also known as sales revenue.
    Services: Intangible economic activities that contribute to the satisfaction of human wants.
    Share Capital: Money employed in a joint stock company and subscribed to by shareholders.
    Share Capital: Money employed in a joint stock company and subscribed to by shareholders.
    Share Premium: Proceeds obtained from issuing shares at a price higher than the present market value of the shares.
    Share: Financial security issued by joint stock companies to raise long term capital.
    Shareholders: Individuals and institutions who contribute funds to finance a joint stock company in return for shares in the company.
    Stock: 1) Unsold goods or inventories are held by a firm. 2) A financial security issued by a joint stock company or the government to raise long term capital. 3)
     Measurement of quantity at any one specific point in time.
    Subsidiary company: Company owned by another company.
    Subsidies: The grants of assistance by the State to encourage the production of a commodity or a service in a certain industry or sector of a company.
    Surplus: An excess of income over expenditure  or assets over liabilities.
    Tangible assets: Physical assets like plant, machinery, equipment and stock, all of which have a monetary value.
    Trade Discount: It is a reduction in the catalogue price given to the buyer for his purchases in bulk. The main aim of trade discount is to increase the sales.  Value of the
     goods is arrived after deducting the trade discount. In the case of cash discount it is separately shown in the accounts.
    Trade: It is a primary part of commerce. It involves the sale, transfer and exchange of goods. It covers buying and selling activities.
    Turnover Tax: A tax that is imposed as a percentage of the price of a commodity on every sale in the production and distribution chain.
    Trial Balance: It is a statement or a list which shows the balances or total amounts of debit items and credit items of all accounts. The Trial balance is prepared in each
    financial period as a summary of the closing of the ledger. The total of the debit side should always be equal to the total of the credit side, which proves the arithmetic
    accuracy of the ledger entry. 
    Trading Account: It is prepared to ascertain the gross result of the business. Gross Profit is arrived by deducting the cost of goods sold from the net sales value.
    Voucher: It is the documentary evidence in support of an entry appearing in the books of account. Example: Receipts, bill, cash memos, counterfoils of cheques etc.
    Wage: It is the money paid to labour for its use.  Wages are often paid on daily or weekly basis.
    Wear and Tear: Deterioration or depreciation in the value of a productive asset over time.
    Wholesaler: A business which buys products in bulk from a manufacturer and sells them in smaller quantities to retailers.
    Working Capital: Current assets minus current liabilities.
    Purchase Ledger: It contains the individual accounts of Trade Creditors . The persons to whom the amounts are due for goods purchased).
    General Ledger: It contains all accounts other than individual accounts of trade debtors and trade creditors.