Getting Started With Tally. ERP 9 & Elemental Feature (Page No-2)

Financial Accounting Course Advanced Tally.ERP 9

🔘Fixed assets: Refer to assets that are purchased for the purpose ot business operations and not for
resale; for example, land, building and machinery.
🔘Current assets: Refer to assets that are kept for a short term and then converted into cash examples of current assets are debtors, unsold goods, bank balance, and bills receivables. 
🔘Tangible assets: Refer to assets that have physical existence, that is, they can not be seen and
touched, such as land, building, plant, machinery, and computer.
🔘Intangible assets: Refer to assets that do not have any physical existence, that is, they cannot
be seen and touched, such as goodwill, trademarks, patents, and copyrights.
🔘Wasting assets: Refer to assets that are natural resources consumed at the time of their use such as mines and quarries.
🔘Liability: Refers to the amount that a business owes to outsiders. Liabilities consist of obligations
to pay money or assets, or render services to an individual, business, or firm. According to Finny
and Miller, Liabilities are debts; they are amounts owed to creditors.
Liabilities can be categorized as follows:
1️⃣Long-term liability: Refers to the liability that is owed for a long period of time, generally more than one year, such as long-term loans and debentures.
2️⃣Short-term liability: Refers to the liability that is owed for a short period of time (usually for a year). Examples of short-term liabilities are creditors, bank overdratts, bill payables, and short-term loans.
🔘Capital: Refers to the amount that an owner has invested in a business. It is also known as owner's
equity, which can be defined as the owner's claim against the assets of the business.
🔘Income: Refers to the profits earned over a given period of time.
Revenue: Refers to the amount of income before any deductions, such as interest, dividends, and
royalties, have been made.
🔘Expense: Refers to the money expended to produce and sell goods and services for profit.
Debtors: Refer to entities to which goods or services have been sold on credit.
🔘Creditors: Refer to entities that provide goods or services to another entity on credit.
🔘Purchase: Refers to the goods that are purchased by a business to produce finished products.
These products are then sold to customers.
🔘Sales: Refer to the goods that are sold out by a business. Goods sold by cash are known as cash
sales and those sold on credit are known as credit sales.
🔘Transaction: Refers to business activities involving the transfer of money, goods, or services
between two individuals or accounts. A transaction is a financial activity that is done by business
parties and recorded in the books of account.
🔘Discount: Refers to a reduction in the price of goods or services. Discournts are of two types: trade
discount and cash discount. The discount allowed on the price of goods on the basis of sales is known as a trade discount, while the discount allowed by debtors on the price of goods for timely payment is known as a cash discount.
🔘Debit: Refers to a transaction that either increases the assets or decreases the liabilities or decreases the liabilities of a business.

🔘Entry: Refers to a process of recording transaction in books of account.

🔘Creadit:Refers to a transaction that either increases the liabilities or decreases the assets of a business.