Accounting Terminology- Part 2

14. Contra entry: Which accounting entry is recorded on both the debit and credit side of         the cashbook is known as the contra entry.

15. Petty cash book: Petty cash is maintained by business to record petty cash expenses of the business, such as postage, cartage, stationery, etc.

16.Promisory note: It is an instrument in writing containing an unconditional undertaking igned by the maker, to pay certain sum of money only to or to the order of a certain person or to the barer of the instrument.

17. Cheque: A bill of exchange drawn on a specified banker and payable on demand.

18. Steale cheque: A stale cheque means not valid of cheque that means more than six months the cheque is not valid.

20. Bank reconciliation statement:  It is a statement reconciling the balance as shown by the bank passbook and the balance as shown by the Cash Book. Obj: to know the difference & pass necessary correcting, adjusting entries in the books.

21. Matching concept: Matching means requires proper matching of expense with the revenue.

22. Capital income: The term capital income means an income which does not grow out of   or pertain to the running of the business proper.

23. Revenue income: The income, which arises out of and in the course of the regular business transactions of a concern.

24. Capital expenditure: It means an expenditure which has been incurred for the purpose of obtaining a long term advantage for the business.

25. Revenue expenditure: An expenditure that incurred in the course of regular business transactions of a concern.

26. Differed revenue expenditure: An expenditure, which is incurred during an accounting period but is applicable further periods also. Eg: heavy advertisement.

27. Bad debts: Bad debts denote the amount lost from debtors to whom the goods were sold on credit.

28. Depreciation: depreciation denotes gradually and permanent decrease in the value of asset due to wear and tear, technology changes, laps of time and accident.

29. Fictitious assets: These are assets not represented by tangible possession or property.

Examples of preliminary expenses, discount on issue of shares, debit balance in the     profit and loss account when shown on the assets side in the balance sheet.

30.Intanglbe Assets: Intangible assets mean the assets which is not having the physical appearance. And its have the real value, it shown on the assets side of the balance sheet.