Auditing is defined as the on-site verification activity, such as inspection or examination, of a process or quality system, to ensure compliance to requirements.

The income statement displays all the revenues and expenses of a company.

Return on Investment Ratio (ROI) = (Net profit / Total assets) x 100.

Assets Account have a debit balance.

Debtors are the persons who owe an amount to a business organisation for buying goods and services on a credit basis.

Current Liabilities are the debts that needed to be repaid in a short period.

Creditor of the business is the external user of financial statements.

An Outstanding Expense is a type of expense that is due but has not been paid. This expense becomes outstanding to the company when, this has taken the benefit, but the related payment has not been made simultaneously. For Example: Rent due but not yet paid.

A Master Budget consists of Sales budget, Production budget and Material budget.

The expanded accounting equation is used by the balance sheet.

In accounting, an economic event is referred to as Transaction.

Lower the Debt Equity ratio higher is the protection to creditors. Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication of greater protection to their money.

Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle.

Vouchers are proof that a business transaction has taken place.

The selling expense budget is usually based on the sales budget and the prior expense budgets in prior years.

An operating cycle refers to the time it takes a company to buy goods, sell them and receive cash from the sale of said goods. In other words, it's how long it takes a company to turn its inventories into cash. The length of an operating cycle is dependent upon the industry.

Bookkeeping refers mainly to the record-keeping aspects of financial accounting, and involves preparing source documents for all transactions, operations, and other events of a business.

The nominal account records all the transactions of a business for one fiscal year.

Intangible Assets have no physical existence. For Example, Goodwill, Brand Recognition, Patents etc. are known as Intangible Assets.

Activity Ratios are a category of financial ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales.