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Ch - 2 Basic Accounting Terms Part 3 - Tally ERP 9 Course - tally erp 9

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Ch - 2 Basic Accounting Terms Part 3

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15) Stock :- Stock is the tangible asset held by an enterprise for the purpose of sale in the ordinary course of business.
i) There are two types of stock
a) Opening stock :- Opening Stock is the stock-inhand in the beginning of the accounting year.
b) Closing Stock :- Closing Stock is the stock-inhand at the end of the accounting period.

16) Trade Receivable :- It is the amount receivable for the sale of goods in ordinary course of business.
i) There are two Classifications.
a) Debtor :- A person who owes amount to the enterprise on account of credit sales of goods or services is called a Debtor. 
For example, 
when goods are sold to a person on credit that person is called a Debtor because he owes the amount to the enterprise. The amount due is known as debt.
b) Bill Receivable :- Bill Receivable means a Bill of Exchange accepted by a debtor, the amount of which will be received on the specified date.

17) Trade Payable :- It is the amount payable for purchase of goods or services in ordinary course of business.
i) There are two Classifications.
a) Creditor :- A person to whom an enterprise owes amount on account of credit purchases of goods or services is called a Creditor. 
For Example,
Mohan is a Creditor of a firm when goods are purchased on credit from him.
b) Bill Payable :- Bill Payable means a Bill of Exchange, the amount of which will be payable on the specified date.

18) Goods :- Goods are the physical items of trade. It is a term that applies to all the items making up the sales or purchases of a business.

19) Cost of Goods Sold :- The direct cost attributable to the production of goods and services.

20) Book Value :- The amount at which an item appears in the books of account.

21) Cost :- It is the amount of expenditure on a specified product or article.

22) Voucher :- Voucher is an evidence of a business transaction. Examples of voucher are Cash Memo, in or Bill, Receipt, Debit/Credit Notes etc.

23) Entry:- A Transaction or event when recorded in the books of accounts is called an entry.

24) Discount :- When customers are allowed any type of reduction in the prices of goods by the business, or from the amount paid by the customers is called Discount.
i) There are two types of discount
a) Trade Discount :- Trade Discount is the rebate allowed by the seller on the basis of sales.
b) Cash Discount :- Cash Discount is the rebate allowed for timely payment of due amount.

25) Proprietor :- The person who makes the investment and bears all the risks connected with the business is called the proprietor.

26) Depreciation: - Depreciation is a fall in the value of an asset because of usage or with passage of time or obsolescence or accident.

27) Bad Debt:- Bad Debt is the amount that has become irrecoverable.

28) Insolvent:- Insolvent is a person or enterprise which is not in a position to pay its debts.

29) Solvent:- Solvent is a person or enterprise which is in a position to pay its debts.

30) Balance Sheet :- It is a statement of the financial position of an individual or enterprise as at a given date, which exhibits its assets, liabilities, capital, reserves and other account balances at their respective book values.