Accounting Definations

Partnership:
In a partnership, ownership is divided between two or more persons who agree to share t? property and skills to start and operate a business. Like the single proprietorship, a partnership busines simple to organise.
(c) Joint Stock Company:
A joint stock company is formed under the Companies Ordinance, 1984 and has the legal righ: act as a person. It may be owned by many people. A company has its own name, in which it can bu>. and sell property; make contracts; borrow money; and take court action. The persons who have m investment in the company are known as shareholders.
2. GOODS OR MERCHANDISE
In accounting the word "Goods" has a special meaning. It refers to something which has bi purchased by a trader for resale purposes or anything which has been manufactured for selling purpo* For example, if a trader purchases furniture for use in the business, it will not be regarded as "goods", bu it is purchased for resale, it will be regarded as "goods". The same article may be "goods" for one trader may not be so to another trader. For example, furniture is not "goods" for a book seller; but it will regarded as "goods" to a furniture -dealer.
Thus, cloth will be "goods" to a cloth dealer
Watches will be "goods" to a Watch dealer
Books will be "goods" to a Book - Seller
Stationery will be "goods" to a Stationery dealer. But watches, books or stationery will not be considered as "goods" to a cloth dealer.
3. PURCHASES:
In accounting language the word "Purchases" has a special meaning. When saleable gt ioil-bought in a business, it is said that "purchases" have been made. For example, to a cloth dealer, when cloth is purchased, it will not be necessary to mention that cloth has been purchased ( simply it will be s that purchases have been made. On the other hand, if stationery is purchased, then it will be essential mention that stationery has been purchased.
4. CASH PURCHASES:
If goods are purchased from a supplier and payment is made to him at the same time, purchases are known as "Cash Purchases". For example, Mr. X purchased goods from a seller, Mr. Y. Rs. 5000 on 1st January, 2005, and payment is made to the seller (Mr. Y) at the same date (1.1.2005), it i be a case of cash purchases.
5. CREDIT PURCHASES OR "PURCHASES ON ACCOUNT:
When goods are purchased from a seller and payment is not made to him at the same time, rat the payment is arranged to be made at some future date, such purchases are known as "credit purchases' "Purchases on account". For example, Mr. A purchased goods from Mr. B for Rs. 5000 on 1st Jam 2005 and Mr. A agreed to make the payment of goods on 15th January, 2005 (payment has not been on i.1.2005), it will be a case of credit purchases. On 15th January Mr. A will pay Rs. 5000 to Mr. B.
6. PURCHASES RETURNS OR RETURNS OUTWARDS:
Goods once purchased may subsequently be sent back to the seller for certain reasons, i.e. gc are defective, not according to specification, damaged or below standard. Such return of goods to the set