Here today i will goes to give a list of top 27 basic business terminology of business that should know by every businessman’s. Without learning of these terminology a businessman can’t goes for successful business. Or maximum successful business owners knows about these terminology.
These are only basic terminology of business if you need advanced terminology of business than you can comment bellow of this article. Business is very important aspect of society. When it comes to profit than the business comes first because business have only main profit motive.
Top 27 Basic Terminology of Business for Businessman’s
So now we will discuss about the 27 terminology of business. Learning basic terminology of business will help you to improve business skills. Here if you don’t have a master degree in business or any business degree but you start a business without any degree than these terminology also help you to improve your business.
In this article we will goes about 27 main business terms which are very important from every aspect. These terms also help you to do time management for your business. So let’s discuss about these 27 terminology of business:-
(1.) Revenue
The increment of business owner capital which is done due to transactions like sale and purchase is known as revenue. This is done by sales of products and services.
(2.) Sales
When a person sale their products and services to people for some money than that thing is known as sales. Sales can be done on cash bases or as well as credit bases.
(3.) Expenses
The cost of products and services that are used for generate revenue is known as expenses.
(4.) Purchase
In which products and services a businessman do business to buy these products is known as purchase. Purchase can be at cash or at credit.
(5.) Owner’s equity
Owner’s equity means that amount of capital which is invested by the businessman in the business. It can be more than the borrowed equity or less than the borrowed equity, depends on the size of business and the background of businessman.
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If businessman is so rich than it can be possible that most or a big part of capital was invested by the business owner in the businessman. This condition will apply only than if owner didn’t start a sole proprietorship.
In case of sole proprietorship it can be possible that the whole capital was invested by the business owner or businessman family members of businessman friends.
(6.) Liabilities
The sum of amount which should pay by the businessman to other businessman’s or peoples known as liabilities of the businessman’s. For example creditors, bills payable, Bank overdraft etc.
(7.) Balance sheet
Balance sheet is a financial statement which helpful in to disclose any business financial position in a specific date. This statement is prepared by the business at the end of the financial year.
(8.) Book-Keeping
To record all business transactions in the primary accounting books is known as book keeping it reduce the fear of leaving any transaction without record. It includes entry of business transactions in the journal,
(9.) Net profit
Net profit represent higher incomes on the expenses. It means when the credit side of the profit and loss account is higher than the debit side of profit and loss.
(10.) Accounting Cycle
Accounting cycle is a process which start with writing transactions and which end with creation of final accounts like trading account, profit and loss account, balance sheet etc.
(11.) Net loss
Net loss represent higher expenses on the incomes. It means when the debit side of the profit and loss account is higher than the credit side of profit and loss.
(12.) Profit margin
Profit margin is a very important term of business it will decide to businessman that how much profit he should earn from the product or services. If businessman wants more profit than he can decide more profit margin otherwise vice versa.
(13.) Assets
All the fixed and non fixed things in a business which have a specific value and businessman is owner of them than these things are assets of business, Or we can say that these things known as assets. Examples of assets like. Cash, Furniture, Land-building, investment, bills receivable, inventory, debtors.
(14.) Cash flow
Cash flow means inflow or outflow of the funds in the business. If the cash or funds inflow is greater than the cash or funds outflows than this situation is good for business. I cash outflow is more than the cash inflow than the situation is not good for business. In that case business should improve their cash flows.
(15.) Drawings
When a businessman take money or products and services from the business for their personal use than these money or products and services known as drawings.
(16.) Return on investment
Return on investment is that amount which businessman received from business. It will help to measure the efficiency of business that how much it is efficient. If return on investment is higher than it will we known that investment is very effective and efficient otherwise its vice versa.
(17.) Capital
Capital include all the things by which a businessman start their business. A businessman can start business using money, goods, stock, debtors, creditors an other things all these things is capital of a business.
(18.) Debtors
Debtor is a person, firms, companies and corporation from whom business have to received money or other things to received from them. Whenever they didn’t pay their lability t business till than these become business debtors.
(19.) Creditors
All the parsons, firms, companies, corporation to whom businessman should pay any amount or if have other liabilities towards them, than these parsons, firms, companies, corporation become or known as business creditors.
Also Read: Top 27 Basic Terminology of Business for Businessman’s
Whenever business not pay their labilities toward these parsons, firms, companies, corporation till than these parsons, firms, companies, corporation are known as business creditors.
(20.) Voucher
A legal document of any business transaction is known as a voucher. It can help us in various circumstances like if anyone do case on the court.
(21.) Journal
Journal is a accounting book in which every day transaction are recorded with the help of journal rules by date wise. This book is a primary book of accounting and this book become helpful for ledger recording. In ledger book all the transactions are recorded from the journal.
(22.) Account
Account is a statement in which every person, assets, income-expenditure related transactions are recorded. Every person, assets and income-expenditure have separated account where every transaction are recorded on the account nature mainly in accounting there are three main types of accounts:-
- Personal Account.
- Real Account.
- Nominal Account.
(23.) Ledger
Ledger is a book in which accounts are categorized by their nature and transaction are recorded by the nature of accounts. Also in ledger transaction related with every account recorded in specific account.
(24.) Debit Note
This is a form which is written by the customers to the seller. This note include some very important information like reason to return goods, goods rate and goods price. And this by using this note the seller account has been debited.
(25.) Credit Note
When any customer return entire purchased goods or a part of goods to the seller or businessman than seller write credit note to the customer, which will work as a credit voucher. By this voucher seller share information with customer that their goods has been received and accepted by the seller and customer account has been credited.
(26.) Invoice
Invoice is a detailed paper of business transaction which is given by the businessman to its customer. In invoice all the business transaction details entered like Date of transaction, Customer name, Quantity of stock, Rate, Discount, Total price etc.
(27.) Discount
When a businessman sales their products or services after deducting some amount from its actual amount than the deducted amount is discount. It can be very low or as well very high based on product or services category.
Conclusion
If we want to conclude this article than we can say that, in this article we discuss about top 27 business terminology which should know every businessman’s who think to create a successful business.
I hope you were enjoy this information. If you need advance terminology of business than you can easily ask from us. Just comment bellow with your question.