Financial Accounting definition

Accounting Definitions

Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities.

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A transaction is a business event that has a monetary impact on an entity's financial statements, and is recorded as an entry in its accounting records. Examples of transactions are as follows: Paying a supplier for services rendered or goods delivered.

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A temporary account used in the periodic inventory system to record the purchasesof merchandise for resale. (Purchases of equipment or supplies are not recorded in the purchases account.) This account reports the gross amount of purchases of merchandise.

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Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation.

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Business

a person's regular occupation, profession, or trade.

commercial activity.

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A purchase return transaction is when the buyer of merchandise, inventory, fixed assets, or other items sends these goods back to the seller. Excessive purchase returns can interfere with the profitability of a business, so they should be closely monitored

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Asset classification is a system for assigning assets into groups, based on a number of common characteristics. Various accounting rules are then applied to each asset group within the asset classification system, to properly account for each group. 

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Owners' Equity. Definition: Owners' equity is the total assets of an entity, minus its total liabilities. ... In the balance sheet of a sole proprietorship, owners' equity refers to the sum total of the following transactions: + Original owner investment in the business. + Donated capital

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sales returns. Merchandise that was returned to the seller by a customer. This account is a contra sales account. When merchandise sold on credit is returned, this account is debited and Accounts Receivable is credited.

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Summarize

give a brief statement of the main points of (something).

The word summarizing used in the accounting field means to prepare  the trial balance. This is basically balancing the books at the end of the month or year.

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Capital in accounting, according to Accountingverse, is the worth of the business after the total liabilities owed by a company is subtracted from that company's total assets. Capital may also be labeled as the equity in a company or as its net assets.

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A commission is a fee paid to a salesperson in exchange for services in facilitating or completing a sale transaction. The commission may be structured as a flat fee, or as a percentage of the revenue, gross margin, or profit generated by the sale.

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Definition: An outflow of money or asset to another individual or company as payment for an item or service. Technically speaking, an expense is an event where an asset is used up or a liability is incurred. With regards to the accountingequation, expenses effectively reduce owner's equity.

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In accounting, the word "expenditure" is used to indicate a cost that a company pays to acquire equipment or other assets. Expenditures can also reduce liabilities or be disbursed to owners. They can be considered a type of expense, but expenses and expenditures are listed differently on income statements.

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A capital expenditure is an amount spent to acquire or improve a long-term asset such as equipment or buildings. Usually the cost is recorded in an account classified as Property, Plant and Equipment. The cost (except for the cost of land) will then be charged to depreciation expense over the useful life of the asset.

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A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred. By doing so, a business is using the matching principle to link the expense incurred to revenues generated in the same accounting period.