and also provide advances loans to businesses for development. Banks provide a different kind of services and business advice as well. The bank is the financial institution where person/businesses deposit their incomes and from which they pay their bills. The difference between two sides of an account is called balance.Ī company inability to pays debts is called bankrupt or insolvent.

It may be the balance of cash, goods, accounts receivable and accounts payable which is carried down/forward for next period for treatment. Note there is a difference between bookkeeper and Accountant we explained in another separate topic Accountant Vs Bookkeeper

The business organizations engaged in producing goods are called as manufacturing concerns.Ī trained and qualified person who collects, records and report on the financial transactions carried out by a business is called Bookkeeper. The business organization which is encased in buying and selling of goods merchandise are called merchandising or trading concerns, while those, which are engaged in providing any services are called concerns. The business includes any activity undertaken for the purpose of earning profits such as buying and selling of goods, rendering services and manufacturing goods. The example is patient rights, copyright, goodwill etc similarly, the value of leasehold property also decreases with the passage of time.Īccounting Basic Term s in my list is Business. The intangible assets whose property right is obtained for the specific period of time diminish in value with the passage of time this called as amortization.

The basic accounting terms Assets means anything valuable possessed by a firm with the following three features qualifies as assets. A person to who goods are sold on credit by a business organization is called account receivable or debtor.Ī person from whom a business organization or individual purchases goods on credit is called creditor.

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