Business and Accounting Basics

Studying principles of accounts can be very easy once you learn which items are Assets, Liabilities, Capital, Income and Expenses. The accounts that fall under these 5 headings are used throughout your POA course. You can even associate the ALICE accounts with action words, you OWN assets, OWE liabilities, EARN …

Assets are the items owned by a business. They are non-current also known as fixed or they are current also known as liquid. Non-current or fixed assets are those tangible or non-tangible items that have long life in the business. They are classed as permanent when compared to the current …

A cash discount is a reduction of the cost of an item or service that a seller offers to a buyer to encourage cash payment for an immediate or outstanding invoice. A seller offers cash discounts to obtain cash quickly to pay off debts and invest the money back into …

A trade discount is a reduction of the list price of products from a seller to a buyer as an incentive for future business. The trade discount is given as a percentage to deduct from the list price which is the normal selling price. In order for a buyer to …

Everything in a business has its own account which falls under one of 5 types of accounts or 3 classes of accounts. The 5 types of accounts are assets, liabilities, income, capital and expenses, also known as ALICE accounts. Each account shows details of an item from the date it …