Giving Examples, explain Each of the Following Accounting Terms:- Accounting

Giving examples, explain each of the following accounting terms: Fixed assets Revenue Expenses Gain Profit Capital Short-term liabilities
Giving examples, explain each of the following accounting terms:
  • Fixed assets 
  • Revenue 
  • Expenses
  • Gain 
  • Profit 
  • Capital
  • Short-term liabilities




Fixed assets: Fixed Assets refer to those assets which are held for continued use in the business to produce goods and services and not meant for resale.

Example:
  1. Land and Building
  2. Plant and Machinery,
  3. Office furniture,
  4. Vehicles such as company trucks.

Revenue: Revenues refer to the amount received from the day-to-day activities of the business entity.

Example:
  1. Commission received,
  2. dividend,
  3. Sales
  4. Interest revenue
Expenses: An expense in accounting is the money spent, or costs incurred, by a business in its effort to generate revenues.

Example:
  1. Wages,
  2. salaries,
  3. commissions,
  4. Repairs and maintenance,
  5. Rent.
Gain: A profit that arises from events or transactions which are incidental to business such as the sale of fixed assets, appreciation in the value of an asset.

Example:
    1. profit on the sale of fixed assets, 
    2. appreciation in the value of an asset, 
    3. profit on the sale of an investment.
    Profit: This refers to the excess of revenue over the expense. It is normally categorized into gross profit or net profit.
    1. Goods sold above its cost.
    Capital: The capital means the assets and cash in a business, It refers to the amount invested by the owner of a firm. It may be in form of cash or asset.

    Example:
    1. cash, 
    2. machinery, 
    3. receivable accounts, 
    4. property, or houses.
    Short-term liabilities: Short-term liabilities are the liabilities that are incurred to be paid or are payable within a year.

    Example:
    1. Bank overdraft creditors,
    2. Bills payable,
    3. Outstanding wages,
    4. Short-term loans.




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