What is Liability

Liability:-

Liabilities are claims against assets by the bodies outside of the business. Examples of liabilities are:

• Loans from banks

• Creditors

• Bank overdrafts e.t.c

What is Asset

Asset:-
 

Assets are tangible and intangible items that have value in exchange which the business owns.

Examples of assets are:

• Cash
• Buildings
• Machinery
• Furniture
• Debtors (money owed from customers)
• Stock / Inventory e.t.c

What is Capital Expenditure

Capital Expenditure:-

Capital Expenditure is an expenditure which is capitalized as occurred. It has further utility so it is capitalized in the Balance Sheet.

For Example purchase of Fixed Assets.

What is Revenue Expenditure

Revenue Expenditure:-
 

Revenue Expenditure is an expenditure which is expend as occurred. It has no further utility so it is expend in the income statement.

For example Salary, Utility expenses, Rent Payments e.t.c

What is Finance Costs

Finance Costs: Finance costs are those costs associated with providing the permanent, long term and short term finance. That is, within the section headed finance costs we will find dividends, interest on long term loans and interest on short term loans e.t.c.

What is Fixed Asset

Fixed Asset:-
 

Fixed Assets are long term assets with a maturity of more than one year.

Examples are

• Equipments
• Furniture s
• Fixtures
• Machinery
• Goodwill