Basic Accounting Terms ( continued)
Dear Students, Learning Objectives *Introduction *Important Accounting Terms # Loss # Purchases # Sale # Goods # Stock # Debtor # Creditor # Voucher # Discount # Account Introduction: Introduction/ Recapitulation 1. Loss : Loss is the excess of total expenses over total revenue. For example, if revenues are Rs. 90000 and expenses are Rs 120000, the loss will be Rs 30000. Loss decreases the Owner's Equity. The term Loss is also used in another contexts: • Loss also refers to such activities of the business for which no benefit is received by the firm. For example, loss due to fire or theft. • Loss also arises from events of non recurring nature, like loss on sale of fixed assets. Expenses versus losses . Expense is incurred to generate revenues, whereas, losses do not. For example, depreciation is an expense, while goods burnt by fire is a loss. • A firm may take utility/benefit or services in lieu of e...
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