Financial Terms Flashcards

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Account

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A systematic record of financial transactions relating to a particular asset, liability, equity, revenue, or expense. Eg: Cash Account, Purchase Account.

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Business Transaction

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An event or an exchange between two or more parties that has a monetary impact on the financial position of a business. Eg: Purchase of raw material for cash.

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Capital

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The money or other assets contributed by the owner(s) to the business for its operations.

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Asset

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A resource owned by a business that is expected to provide future economic benefits. Eg: Equipment, Inventory.

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Liability

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A financial obligation or debt that a business owes to another party. Eg: Loans, Accounts Payable.