Common Accounting Terms
You will learn the common terms used in accounting, their meanings, and how they are related to one another in a business context. These terms will be linked to everyday language to make them easier to understand. This foundation will prepare you for the next important stage of accounting – double entry.
Related Lessons:
Introduction To Accounting Terminology
Here is a list of common accounting terms that you will come across while learning the accounting subject:
- Cash in hand
Are cash held in the office, similar to the cash in your wallet - Cash at bank
Are money kept in the bank - Inventory
Are goods bought by a business to resell for a profit - Trade receivables
Are credit customers who owes the business - Trade payables
Are credit suppliers whom the business owes - Capital
Are assets contributed into the business by its owner
- Drawings
Are assets withdrawn from the business by its owner for personal use - Loans
Are money that the business borrowed and to be repaid over a period of time - Motor vehicles
Includes cars, vans, lorries, motorcycles - Office equipment
Includes printers, tablets, mobile phones, computers - Fixtures and fittings
Includes shelves, tables, chairs, lights - Machinery
Refers to any machines used to produce goods for resale
- Premises
Refers to shops and buildings that the business owns - Sales revenue
Are the sales of goods to customers at net selling price - Sales returns
Are return of goods by customers at net selling price - Cost of sales
Refers to the cost of inventory that was sold - Discount allowed
Are discounts given by the business to its credit customers (trade receivables) upon payment within the agreed time - Discount received
Are discounts received by the business from credit suppliers (trade payables) upon payment within the agreed time