Define the Terms Assets, Liabilities, Owners Equity, Reference, Expense and Drawings
Subject: Accounting | Topics:

Ans.:- The terms of assets, liabilities, Owner’s equity, Revenue, Expense and Drawings are expressed in brief:


Goods and wealth measurable in terms of money of a business concern which help in increasing wealth and creation of utility are called assets.


Liabilities are claims against assets. That is liabilities are existing debts and obligations.

Owner’s Equity:

The ownership claim on total assts is known as owner’s equity. It is equal to total assets minus total liabilities. The assits of a business are supplied or claimed by either creditors or owners. To find out what belongs to owners. We subtract the creditors’ claimb (the liabilities) from assots. The remainder is the owner’s claim on the assets_____ the owner’s equity.


Revenue is the inflow of assets arising out of sale of commodities and services. The influence of revenue or income over accounting equation is started. Generally revenues result from the sale of merchandise, the performance of services, the rental of properly, and the lending of money.


Amount spent earning is cabled expense. Expenses are the lost of assets consumed or services used in the process of earning revenue. They are decreases in owner’s equity that result from operation the business. Expenses represent actual or expected cash out flows. Like revenues expenses take many forms and are identified by various names depending on the type of asset consumed or service used.


An owner many withdraw cash or other assets for personal use. Those withdrawals cou’d be recorded as a direct decrease of owner’s equity. How ever it is generally considered preferable to use a separate classification called drawings to determine the total withdrawals for each accounting period. Drawing decrease owner’s equity.

Related Accounting Paper:

Popular Accounting Paper:

Contemporary Issues of Cost and Management Accounting in Bangladesh

Abstract Cost and Management Accounting practice helps an organization to survive in the competitive, ever-changing world, because it provides an important competitive advantage for an organization that guides managerial action, motivates behaviors, supports and creates the cultural values necess.....

Accounting Principle : The Recording Process

The Recording Process are entering transactions in the general journal and posting them to the correct general ledger accounts is time consuming. In the general journal, a simple transaction requires three lines—two to list the accounts and one to describe the transaction. The transaction must .....

Traditional Approaches to Accounting Formulation Theory

Introduction Various approaches have applied over time to the formulation of an accounting formulation theory. Some of these approaches are known as “traditional” approaches, because they are characterized by the absence of a vigorous process of verification in the attempt to develop an accou.....

Account Receivable Management at Tata Steel

The project deals in “account receivable management at Tata Steel”. Account receivable management is one of the most important aspects of an organization, as it deals with the management of the outstanding. The profit of the company mainly depends on the accounts receivables. This report brie.....

Internship Report on Accounting System of Uttara Bank Ltd Shymoli Branch Dhaka

 1.1    Introduction: The internship program of BBA students of Department of Marketing, Institute of Business Studies, DarulIhsanUniversity, is an imputing part of the BBA program, 3 credit hours are for this internship program, out of 135 credit hours of the program. The program is for 3 m.....