The most common accounting terms used in an organization?

 Accounts Payables – In simple words, it refers to – where a business be in debt to its
vendors that have provided the business with goods or services. The department of AP
will verify the invoices and confirm that the goods and services are received before
paying the amount to their vendors.
 Accounts Receivables – It means that the company receives the amount by the
customer for the goods and services provided by the company on credit. In short, the
customers are yet to pay their vendor for the goods and services rendered.
 Debit and Credit – These are the entries made in account ledgers. A debit entry and
credit entry represent a transfer of amount to the account and from the account
respectively.
Every debit entry must have a corresponding credit entry for the same amount and
vice-versa
A tip: Left side – Debit and Right side – Credit
 Invoice – As everybody knows it’s a bill. An invoice is a document that is sent to the
buyer by the seller which contains the list of goods, services, and amounts in detail
that are sold. It contains – Invoice Number, Billed Date, Bill Through Date, Name and
Contact Details of Buyer and Seller, Terms (30 days usually), Details of product &
services and Invoice Amount, etc.
 Expenses – To run a business and hopefully gain profit, the company incurs
expenses. In short, the amount of money the company spends to run the business is
called expense. Example – Rent expense, wages expense, interest expense, etc. It may
be paid either on a cash or accrual basis. (Accrual expense – the expense which is
already shown in the books before it is paid)
 Income – It is a happy word for a businessman. It is the profit or revenue earned by
the company from the sale of goods and services.
 Billed amount – It is the total amount charged to the buyer for the goods and services
provided by the provider. It may be a taxable or non-taxable invoice.
 Auditing – The process of checking the authenticity of the books of account prepared
by the accountant is Auditing. This process is done to check the accuracy of the
financial statement of the company.
 Bank Statement – This is a document that contains the income and expense details
(transactions) of the company. It is prepared usually once a month.