Explain the following terms of Accounting: (a) Sales (b) Revenues (c) Profit (d) Gain (e) Loss (f) Discount (g) Drawings.

(a) Sales – Sales are the amounts earned by the firm by selling its goods to customers. Sales may be cash sales or credit sales.

(b) Revenues – Revenues are the amounts earned by the business by selling goods or services to customers. Such as sales revenue, commission, interest, dividend, rent earned etc.

(c) Profit – The excess of revenues of a period over its related expenses is profit. Profit increases the investment of the owner.

(d) Gain – Gain is a profit that arises from events or transactions that are incidental to the business. E.g. – profit on sale of fixed asset, winning a court case etc.

(e) Loss – Loss is the excess of expenses of a period over its related revenues. It decreases owner's investment. E.g. – loss of cash or goods by fire, loss on sale of fixed assets etc.

(f) Discount – Discount is the deduction in the price of goods sold. It may be of two types – trade discount and cash discount.

(g) Drawings – Drawings are the withdrawals of money or goods by the owner from the business for personal use. They reduce the investment of the owner.