Meaning and Explanation of Liabilities

The company’s debts and obligation towards third parties are Liabilities. It shoes what it owes to others. It is recorded in left side of Balance sheet. It includes Capital, Bills payable, creditors, outstanding accounts etc

Meaning and Explanation of Asset

Any property or item that has monetary value which is owned by the business or an Individual is a Asset. It will be recorded in the Balance sheet. It can even be tangible or intangible assets. It is the resource of the company. Examples: Buildings, Furniture, stock, plant and machinery, goodwill etc

What is Credit, Meaning of Credit

All income and gains are Credit. It will increase the Liabilities and decrease the asset. . It will come under Right hand side of the Books of accounts. In abbreviated form Credit is written as “Cr”.

•              Person getting goods without paying cash is credit purchase.
•                    Person selling goods without collecting cash is credit sales.

What is Debit, Meaning of Debit

All losses and expense are Debit. It will increase the asset and decrease the liabilities. It will come under left hand side of the Books of accounts. In abbreviated form Debit is written as “Dr”

What is Balance Sheet

Balance sheet is a financial statement which records Assets and liabilities of the business. It shows the Financial position of the business for a specific period. The financial reports show the two sides of the financial situation (i.e) what it owns (Assets) and what is owes (Liabilities). Both the sides of a Balance sheet should be balanced. It is used by Accountant, Auditors, Investors etc for various purposes. It is prepared in quarterly, half yearly and yearly basis.

  Here is an example of Balance sheet:

What is Book keeping , Meaning of Book keeping

Book-keeping is that branch of knowledge which tells us how to keep a record of business transactions. It is often routine and clerical in nature. It is important to note that only those transaction related to business which can be expressed in terms of money are recorded. The activities of book-keeping include recording in the journal, posting to the ledger and balancing of accounts.

Golden Rules of Accounting

All the business transactions are recorded on the basis of the following rules.

S.No	Name of Account	Debit Aspect	Credit Aspect
1.	Personal	Debit the Receiver	Credit the giver
2.	Real	Debit what comes in	Credit what goes out
3.	Nominal	Debit all expenses and losses	Credit all incomes and gains

What is Accounting / Meaning of Accounting

Accounting means recording of all Business, Financial transactions in the BOOKS OF ACCOUNTS for an individual or for a business to calculate profit/loss. It takes Debit and Credit into consideration. The basic principle followed is "Golden Rules of Accounting"