1. Fictitious assets : Fictitious assets means assets do not have physical form (existence), do not have any realizable value (it means zero value) and cannot be converted into cash, are known as fictitious assets. Establishment expenses or Preliminary expenses, issue cost of shares and debentures, share or debenture discount, etc. are fictitious assets.
2. Receipts : When money is received due to consequence of business transactions, it is known as receipt. Receipts are categorized into two categories :
- Regular receipts and
- Capital receipts.
3. Depreciation : Every year the value of assets is reduced by certain rate. Amount which is reduced, is called as depreciation. Depreciation is non-cash expense of the business. Before making tax payment to the government depreciation is deducted.
4. Posting : Economic or financial transaction of the business are first recorded in the journal book or in the subsidiary book. The process of recording the debit or credit effect of a transaction in the account is known as posting.
