Accountancy

Sales return journal records “goods returned by customers”. Sales Return (Journal) Book Sales return books are used to record the goods returned by customers to them on credit.

A bill of exchange is called a Bill payable by one who is liable to pay it on the due date. It is a written, unconditional order by one party (the drawer) to another (the drawee) to pay a certain sum, either immediately (a sight bill) or on a fixed date (a term bill), for payment of goods and/or services received.

Trial balance It lists down the balances of accounts. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column.

Exercising a degree of caution in the case of judgements needed under the condition of uncertainity is the assumption of Prudence concept. Prudence Concept or Conservatism principle is a key accounting principle which makes sure that assets and income are not overstated and provision is made for all known expenses and losses whether the amount is known for certain or just an estimation.

Gross profit is equal to Sales – Cost of goods sold.

LIFO inventory costing methods is supposed to issue the most recently purchased goods. LIFO, which stands for last-in-first-out, is an inventory valuation method which assumes that the last items placed in inventory are the first sold during an accounting year.

Bills payable, Outstanding expenses and Bank Overdraft are the current liabilities.

Assets minus liabilities equal to Capital, it shows that a company’s total amount of assets equals the total amount of liabilities plus owner’s (or stockholders’) equity.

Mr. Z account account will be credited, if business bought goods on credit from Mr. Z.