{"id":3518,"date":"2021-06-12T10:00:28","date_gmt":"2021-06-12T09:00:28","guid":{"rendered":"https:\/\/statanalytica.com\/blog\/?p=3518"},"modified":"2021-08-14T11:09:40","modified_gmt":"2021-08-14T10:09:40","slug":"accounting-terms-to-know","status":"publish","type":"post","link":"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/","title":{"rendered":"Top 17 Basic Accounting Terms to Know by the Students"},"content":{"rendered":"\n<p>People get confused when they talk about accounting terms like debit and credit, assets and liabilities, accounts receivable and account payable, and many more. They often find it difficult to know the exact meaning and difference of the terms. In this blog, we will explore different accounting terms that everyone should know.<\/p>\n\n\n\n<p>Who needs to understand accounting terms?<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>An accountant<\/li><li>A bookkeeper<\/li><li>The business people<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"why-do-they-need-to-understand-these-terms\"><\/span>Why do they need to understand these terms?<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a30d4dba02c6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ff5104;color:#ff5104\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ff5104;color:#ff5104\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a30d4dba02c6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#why-do-they-need-to-understand-these-terms\" >Why do they need to understand these terms?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#1-balance-sheet\" >1 Balance Sheet<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#2-assets\" >2 Assets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#3-liabilities\" >3 Liabilities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#4-debit\" >4 Debit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#5-credit\" >5 Credit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#6-double-entry\" >6 Double Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#7-net\" >7 Net<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#8-gross\" >8 Gross<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#9-accrual-accounting\" >9 Accrual Accounting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#10-accounts-payable\" >10 Accounts Payable<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#also-read\" >Also Read<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#11-accounts-receivable\" >11 Accounts Receivable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#12-financial-statements\" >12 Financial Statements<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#13-cash-flowcf\" >13 Cash Flow(CF)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#14-equity\" >14 Equity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#15-insolvency\" >15 Insolvency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#16-general-ledger-gl\" >16 General Ledger (GL)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#17-trial-balance\" >17 Trial Balance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#question-1-what-is-the-basic-accounting-equation\" >Question 1. What is the basic accounting equation?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#question-2-when-we-record-the-financial-transactions-such-as-debit-credit-on-the-left-and-right-sides-respectively-what-is-this-system-named\" >Question 2. When we record the financial transactions such as debit, credit on the left and right sides, respectively, what is this system named?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#question-3-accounts-payable-is-used-when-we\" >Question 3. Accounts payable is used when we-<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#question-4-if-you-are-going-to-start-your-own-business-what-do-you-need\" >Question 4. If you are going to start your own business, what do you need?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#question-5-what-is-the-documents-name-that-shows-the-companys-assets-liabilities-and-owners-equity\" >Question 5. What is the document&#8217;s name that shows the company&#8217;s assets, liabilities, and owner&#8217;s equity?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#conclusion\" >Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#frequently-asked-questions\" >Frequently Asked Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#how-is-accounting-useful\" >How is accounting useful?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#what-are-the-requirements-to-be-an-accountant\" >What are the requirements to be an accountant?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/statanalytica.com\/blog\/accounting-terms-to-know\/#what-is-the-difference-between-a-bookkeeper-and-an-accountant\" >What is the difference between a bookkeeper and an accountant?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p>All the above professionals need to understand the accounting terms because they have to work with the accounting terms such as liabilities, assets, credit, debit, etc. Moreover, to maintain transparency between the business activities or to run the business smoothly, they should know the proper meaning of accounting terms.<\/p>\n\n\n\n<p>Furthermore, When you deal with the different statements to evaluate the company&#8217;s performance, you need to be accurate with all the terms.<\/p>\n\n\n\n<p>Let&#8217;s discuss the accounting terms to know step by step-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-balance-sheet\"><\/span><strong>1 Balance Sheet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a document that represents the assets and liabilities of a company on the left and right sides, respectively. It works on the basis of the accounting equation.<\/p>\n\n\n\n<p>Assets-Liabilities=Owner&#8217;s Equity(capital)<\/p>\n\n\n\n<p>If the investors want to check a company&#8217;s performance, they investigate the balance sheet of that company. For the long life of any business, the assets should be higher than the liabilities. The balance sheet may be prepared quarterly, yearly.<\/p>\n\n\n\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>Balance sheet of XYZ company<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Assets<\/strong><\/td><td><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Liabilities<\/strong><\/td><\/tr><tr><td>Property, land, labor etc<\/td><td>Salary, payrolls, mortgages etc.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-assets\"><\/span><strong>2 Assets<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Things a company possesses, or a company has in terms of money, accounts receivable, goods, and other properties such as furniture, land, etc. All these owned by a company are known as assets. Assets add value to the company&#8217;s financial status.<\/p>\n\n\n\n<p>For instance, if the business owner purchases some equipment for the employees or some computer system for the newly hired employees, it will be considered the company&#8217;s assets.<\/p>\n\n\n\n<p>Assets are represented on the left side of a balance sheet.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-liabilities\"><\/span><strong>3 Liabilities<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Things that a company owes to others such as loans, salaries, and payrolls, etc. Liabilities are recorded on the right side of the balance sheet.<\/p>\n\n\n\n<p>Liabilities=Assets-Owners equity<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-debit\"><\/span><strong>4 Debit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is an entry on the left side of the account that flaunts how much an organization spent on the different practices.<\/p>\n\n\n\n<p>Debit shows the money goes out.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5-credit\"><\/span><strong>5 Credit<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is represented on the right side of the account and shows what amount of money a company received.<\/p>\n\n\n\n<p>Credit means money comes in.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>&nbsp; &nbsp; &nbsp; Account<\/strong><\/td><td><strong>&nbsp; &nbsp; &nbsp; Debit<\/strong><\/td><td><strong>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; Credit<\/strong><\/td><\/tr><tr><td><strong>XYZ company<\/strong><\/td><td><strong>Spend money&nbsp;<\/strong><\/td><td><strong>Received money<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6-double-entry\"><\/span><strong>6 Double Entry<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Double entry is an accounting system where transactions are recorded in a balanced way such as credit, debit and a balance sheet are examples of the double-entry system. It ensures the accuracy of the transactions and records the transaction in separate sections.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7-net\"><\/span><strong>7 Net<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Net is the term that denotes the amount of money left after paying taxes or other expenses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8-gross\"><\/span><strong>8 Gross<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When we talk about the total value of money, including tax payments and other obligations, it is known as Gross value.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9-accrual-accounting\"><\/span><strong>9 Accrual Accounting<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a technique to evaluate a company&#8217;s achievements and financial status without analyzing the cash transactions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"10-accounts-payable\"><\/span><strong>10 Accounts Payable<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This is the amount that a company has to pay to the suppliers for the services and products.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"also-read\"><\/span>Also Read<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li> <a href=\"https:\/\/statanalytica.com\/blog\/books-of-accounting\/\">Top 10 Books of Accounting For The Beginners<\/a><\/li><li> <a href=\"https:\/\/statanalytica.com\/blog\/importance-of-accounting\/\">What are the Key Importance of Accounting in The World?<\/a><\/li><li> <a href=\"https:\/\/statanalytica.com\/blog\/accountant-vs-bookkeeper\/\">Accountant vs Bookkeeper | All You Need to Know About Them<\/a><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"11-accounts-receivable\"><\/span><strong>11 Accounts Receivable<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is the money that a company will receive in the future from the customers. When a customer purchases the product or service from a company but does not pay immediately to the company, instead they use credits to pay, they are debtors of the company and will pay for their services in the future.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"12-financial-statements\"><\/span><strong>12 Financial Statements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These are the annual reports of a business based on those the management, employees and others make decisions. Financial statements present the company&#8217;s economic position, performance, and achievements. It helps the business owner and investors make effective decisions.<\/p>\n\n\n\n<p>As per the guidelines of GAAP (Generally Accepted Accounting Principles), three statements are the deciding factors of a company.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>A balance sheet<\/strong><\/li><li><strong>An income statement<\/strong><\/li><li><strong>Cash flow statement<\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"13-cash-flowcf\"><\/span><strong>13 Cash Flow(CF)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The income and expenses that occurred during the different business operations in a time duration are known as cash flow. For the smooth running of a business, sometimes the owner needs to purchase or sell the products and services.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"14-equity\"><\/span><strong>14 Equity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Equity represents the ownership a person has in the company in percentage. It is calculated by subtracting liabilities from assets. The owner of the company&#8217;s share is called a shareholder.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"15-insolvency\"><\/span><strong>15 Insolvency<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a situation when an organization and individual are unable to pay the debts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"16-general-ledger-gl\"><\/span><strong>16 General Ledger (GL)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The general ledger is the record of the monetary transactions over the Company&#8217;s life.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"17-trial-balance\"><\/span><strong>17 Trial Balance<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is the balancing system of a company where debit and credit are recorded into different columns in order to maintain accuracy.<\/p>\n\n\n\n<p>These are some basic accounting terms to know that are confusing for some people but play a crucial role in the operations and documents.<\/p>\n\n\n\n<p>Let&#8217;s gives the answers to some questions related to these terms to get a better understanding of these terms-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"question-1-what-is-the-basic-accounting-equation\"><\/span><strong>Question 1. What is the basic accounting equation?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a. Liabilities+equity=assets<\/p>\n\n\n\n<p>b. equity-liabilities=assets<\/p>\n\n\n\n<p>c. assets+equity=liabilities<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Ans is option( a.) basic accounting equation is assets=liabilities+equity\/capital<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"question-2-when-we-record-the-financial-transactions-such-as-debit-credit-on-the-left-and-right-sides-respectively-what-is-this-system-named\"><\/span><strong>Question 2. When we record the financial transactions such as debit, credit on the left and right sides, respectively, what is this system named?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a. Double-entry system<\/p>\n\n\n\n<p>b. Single entry system<\/p>\n\n\n\n<p>c. Balance Sheet<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Ans is option (a). In the double- entry system we record the debit and credit information for balancing.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"question-3-accounts-payable-is-used-when-we\"><\/span><strong>Question 3. Accounts payable is used when we-<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a. are going to receive the money<\/p>\n\n\n\n<p>b. are going to pay the money<\/p>\n\n\n\n<p>c. pay the money in advance<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Ans is option ( b). We use accounts payable when we purchase the products or services on credits and need to pay the money in the near future.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"question-4-if-you-are-going-to-start-your-own-business-what-do-you-need\"><\/span><strong>Question 4. If you are going to start your own business, what do you need?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a. assets<\/p>\n\n\n\n<p>b.capital<\/p>\n\n\n\n<p>C.equity<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Ans is option (b) We need capital\/money for a new start up.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"question-5-what-is-the-documents-name-that-shows-the-companys-assets-liabilities-and-owners-equity\"><\/span><strong>Question 5. What is the document&#8217;s name that shows the company&#8217;s assets, liabilities, and owner&#8217;s equity?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>a. Cash flow statement<\/p>\n\n\n\n<p>b. income Statement<\/p>\n\n\n\n<p>c. Balance sheet<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Ans is option (c). Balance sheet is the document that represents the assets, liabilities and owner;s equity.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In this blog, we have explained the top 20 basic accounting terms to know. I hope these terms are helpful for you while doing any calculation regarding the Company&#8217;s operations and activities. We also solved an exercise to expound the terms deeply. Accounting and terms used in accounting sometimes become a headache for people. They get confused in a few similar terms. After reading this blog, you can understand the proper meaning of accounting basic terms. Get the best <strong><a href=\"https:\/\/statanalytica.com\/corporate-accounting-assignment-help\" target=\"_blank\" rel=\"noreferrer noopener\">corporate homework help<\/a><\/strong> online.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"frequently-asked-questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-611750c904ba0\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"how-is-accounting-useful\"><\/span><strong>How is accounting useful?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Accounting is very useful for any organization. It enables the management to make critical decisions in the future based on the past financial transaction records. It is also beneficial for the company\u2019s growth.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-611750c904ba2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"what-are-the-requirements-to-be-an-accountant\"><\/span><strong>What are the requirements to be an accountant?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>To be a certified accountant you need to have a bachelor\u2019s degree and CPA (Certified Public Accountant) exam is mandatory if you want to be an expert in accounting. You also have analytica, mathematical, and statistical skills to solve complex problems.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-611750c904ba3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"what-is-the-difference-between-a-bookkeeper-and-an-accountant\"><\/span><strong>What is the difference between a bookkeeper and an accountant?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>A bookkeeper is responsible for the recording of the financial transactions while an accountant analyses the financial transactions and other activities of any organization. An accountant extracts the valuable information by analyzing the financial transactions.\u00a0<\/p>\n<p>Apart from this a bookkeeper does not need to have any specific skill set whereas an accountant should have mathematical and statistical skills.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>People get confused when they talk about accounting terms like debit and credit, assets and liabilities, accounts receivable and account payable, and many more. They often find it difficult to know the exact meaning and difference of the terms. In this blog, we will explore different accounting terms that everyone should know. Who needs to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3521,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[2],"tags":[633,648,647],"class_list":["post-3518","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-accounting-terms","tag-accounting-terms-to-know","tag-basic-accounting-terms"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/posts\/3518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/comments?post=3518"}],"version-history":[{"count":0,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/posts\/3518\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/media\/3521"}],"wp:attachment":[{"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/media?parent=3518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/categories?post=3518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/statanalytica.com\/blog\/wp-json\/wp\/v2\/tags?post=3518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}