Business Transactions And Financial Statements

Transaction : A business dealing with a creditor, a customer, or others with whom an organizaion carries on business.

Negotiable Instruments : A device used in place of cash in transaction. Checks and  money orders are both familiar kinds of negotiable instrument. So are notes, which are written promises to pay a specific amount of money within a specified time.

Sales Invoice : A business papaer showing the description, quatity, and the unit and total price of goods sold to a customer.

Assets :  The resources owned by the business. Current assets include cash, as well as other instruments that normally can be converted into cash or sold. Fixed assets are tangible assets, such as land, buildings, and machinery. Intangible assets include franchises, patents, copyrights, and goodwill. Other assets include investment, such as stocks, bonds, and real estate.

Liabilities : Liabilities are the opposite of assets; that is, they are what the organiation owes. Obligations that must be paid within the current fiscal period are current liabilities, while those which are not during the current fiscal period are long-term liabilities.

Owners' Equity : The value of the owners' sahre of a business. It can be expressed as what the business owes the owners' or the owners' claim against the net assets or their rights in them.

Investments : Assets that the owners put into (invest in) the business.

Disinvestment : There are three basic types of ownership. An individual proprietorship is an unincorporated business owned by two or more persons. A corporation is owned by one or more persons. The corporation is a distinct legal entity that is separate from its owners. It is the major form of organization for largescale enterprises.

Accounting Period : The time covered by a summary of operating data, generally on year. The accounting period known as the fiscal year may be the same as the calendar year, that is, from January 1 to December 31. Or it may end on the last day of the natural business year - the twelve-month period that ends with the least active point in the annual operating cycle. A thrird possibility is to use some other selected twelve-month period. The fiscal year of the United States government, for example, bagins on July 1 and ends on June 30 of the following year.

Depreciation : The gradual decline in value of a fixed asset, such as real estate (but not land or machinery)

post by : Rony Sutiyanto.