Capital income:
An income which does not grow out of or pertain to the running of the business proper.

Revenue income:
The income which arises out of and in the course of the regular business transactions of a concern.

Capital expenditure:
Means an expenditure which has been incurred for the purpose of obtaining a long term advantage for the business.

Revenue expenditure:
An expenditure that incurred in the course of regular business transactions of a concern.

Differed revenue expenditure:
An expenditure, which is incurred during an accounting period but is applicable further periods also. Eg: heavy advertisement.

Bad debts:
The amount which is consid ered as irrecoverable from debtors to whom the goods were sold on credit.



Depreciation:
Means gradually and permanent decrease in the value of asset due to wear and tear, technology changes, laps of time and accident.

Fictitious assets:
These are assets not represented by tangible possession or property.
Examples of preliminary expenses, discount on issue of shares, debit balance in the profit and loss account when shown on the assets side in the balance sheet.

Intanglbe Assets:
The assets which is not having the physical appearance. And it has the real value, it shown on the assets side of the balance sheet.

Accrued Income :
An income which has been earned by the business during the accounting year but which has not yet been due and, therefore, has not been received.

Out standing Income :
An income which has become due during the accounting year but which has not so far been received by the firm.

Suspense account:
An account to which the difference in the trial balance has been put temporarily.

Depletion:
It implies removal of an available but not replaceable source, Such as extracting coal from a coal mine.

Amortization:
The process of writing of intangible assets is term as amortization.

Capital employed:
The term capital employed means sum of total long term funds employed in the business. i.e. (share capital+ reserves & surplus +long term loans – (non business assets + fictitious assets).

Equity shares:
Those shares which are not having pref. rights are called equity shares.

Preference shares:
Those shares which are carrying the pref.rights is called pref. shares
Pref.rights in respect of fixed dividend. Pref.right to repayment of capital in the event of
company winding up.

Joint venture:
A joint venture is an association of two or more persons who combined for the execution of a specific transaction and divide the profit or loss in an agreed ratio.

Partnership:
It is the relation b/w the persons who have agreed to share the profits of business carried on by all or any of them acting for all.

Factoring:
It is an arrangement under which a firm (called borrower) receives advances against its                 receivables, from a financial institutions (called factor)