According to Carter, depreciation is defined as a gradual and permanent decreased in the value of fixed assets due to obsolescence, passage of time, etc.,

Any physical thing or right owned that has a monetary value is called asset.

Unsold goods lying in a business on a particular date are known as stock.

Goods includes articles, things or commodities in which a business is dealing with. Example: Furniture will be goods for those who deal in furniture.

Invoice is a statement prepared by a seller of goods to be sent to the buyer. It shows details of quantity, price, value, etc., of the goods and any discount given, finally showing the net amount payable by the buyer.

Accounting records are generally accepted as evidence in courts of law and other legal authorities in the settlement of disputes.

This system is not suitable for all business because the actual profit or loss can not be found out by this system. If it is a small business only can follow this system.

Yes, he is correct, it will be treated as drawings and will be recorded in the books.

(i) Solvency is the capability of a person or an enterprise to pay the debts.
(ii) Insolvency is the incapability of a person or an enterprise to pay the debts

An accounting cycle is a complete sequence of accounting process, that begins with the recording of business transactions and ends with the preparation of final accounts

(i) A person who owns the business is called proprietor.
(ii) He contributes capital to the business with the intention of earning profit.

Cost Accounting involves the collection, recording, classification and appropriate allocation of expenditure for the determination of the costs of products or services and for the presentation of data for the purposes of cost control and managerial decision making.

There are three bases of accounting in common usage, namely
(i) Cash Basis
(ii) Accrual or mercantile basis
(iii) Mixed or hybrid basis

The Steps involved in accounting are :
(i) Identifying the transactions and Journalising.
(ii) Posting and Balancing.
(iii) Preparation of Trial Balance.
(iv) Preparation of Trading Account.
(v) Preparation of Profit and Loss Account.
(vi) Preparation of Balance Sheet.

American Accounting Association has defined accounting as "the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information".