accounts and finance material

8/4/2019 Accounts and Finance Material

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1.Definition of accounting: the art of recording,

classifying and summarizing in a significant manner and

in terms of money, transactions and events which are, inpart at least of a financial character and interpreting the

results there of.

2.Book keeping:It is mainly concerned with recording of

financial data relating to the business operations in a

significant and orderly manner.

3. Concepts of accounting:

A. separate entity concept

B. going concernconcept

C. money measurement concept

D. cost concept

E. dual aspect conceptF. accounting period concept

G. periodic matching of costs and revenue concept

H. realization concept.

4 . Conventions of accounting

A. conservatism

B. full disclosureC. consistency

D materiality.

5. Systems of book keeping:


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A. single entry system

B. double entry system

6. Systems of accountingA. cash system accounting

B. mercantile system of accounting.

7. Principles of accounting

a. personal a/c : debit the receiver

Credit the giver

b. real a/c : debit what comes in

credit what goes out

c. nominal a/c : debit all expenses and losses

credit all gains and incomes

8. Meaning of journal: journal means chronological

record of transactions.

9. Meaning of ledger: ledger is a set of accounts. It

contains all accounts of the business enterprise

whether real, nominal, personal.

10. Posting: it means transferring the debit and credit

items from the journal to their respective accounts in

the ledger.


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11. Trial balance: trial balance is a statement containing

the various ledger balances on a particular date.

12. Credit note: the customer when returns the goods get

credit for the value of the goods returned. A credit

note is sent to him intimating that his a/c has been

credited with the value of the goods returned.

13. Debit note: when the goods are returned to the

supplier, a debit note is sent to him indicating that his

a/c has been debited with the amount mentioned in the

debit note.

14. Contra entry: which accounting entry is recorded on

both the debit and credit side of the cashbook is known

as the contra entry.

15. Petty cash book: petty cash is maintained by business

to record petty cash expenses of the business, such as

postage, cartage, stationery, etc.

16.promisory note: an instrument in writing containing

an unconditional undertaking igned by the maker, topay certain sum of money only to or to the order of a

certain person or to the barer of the instrument.

17. Cheque: a bill of exchange drawn on a specified


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banker and payable on demand.

18. Stale cheque: a stale cheque means not valid of

cheque that means more than six months the cheque isnot valid.

20. Bank reconciliation statement: it is a statement

reconciling the balance as shown by the bank passbook

and the balance as shown by the Cash Book. Obj: to

know the difference & pass necessary correcting,

adjusting entries in the books.

21. Matching concept: matching means requires proper

matching of expense with the revenue.

22. Capital income: the term capital income means an

income which does not grow out of or pertain to therunning of the business proper.

23. Revenue income: the income, which arises out of and

in the course of the regular business transactions of a

concern.

24. Capital expenditure: it means an expenditure whichhas been incurred for the purpose of obtaining a long

term advantage for the business.

25. Revenue expenditure: an expenditure that incurred in


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the course of regular business transactions of a concern.

26. Differed revenue expenditure: an expenditure,

which is incurred during an accounting period but isapplicable further periods also. Eg: heavy

advertisement.

27. Bad debts: bad debts denote the amount lost from

debtors to whom the goods were sold on credit.

28. Depreciation: depreciation denotes gradually and

permanent decrease in the value of asset due to wear

and tear, technology changes, laps of time and accident.

29. Fictitious assets: These are assets not represented by

tangible possession or property. Examples of preliminary

expenses, discount on issue of shares, debit balance in theprofit and loss account when shown on the assets side in

the balance sheet.

30.Intanglbe Assets: Intangible assets mean the assets

which is not having the physical appearance. And its

have the real value, it shown on the assets side of the

balance sheet.

31. Accrued Income : Accrued income means income

which has been earned by the business during the

accounting year but which has not yet been due and,


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therefore, has not been received.

32. Out standing Income : Outstanding Income means

income which has become due during the accountingyear but which has not so far been received by the firm.

33. Suspense account: the suspense account is an

account to which the difference in the trial balance has

been put temporarily.

34. Depletion: it implies removal of an available but not

replaceable source, Such as extracting coal from a coal

mine.

35. Amortization: the process of writing of intangible

assets is term as amortization.

36. Dilapidations: the term dilapidations to damage done

to a building or other property during tenancy.

37. Capital employed: the term capital employed means

sum of total long term funds employed in the business.

i.e.

(share capital+ reserves & surplus +long term loans

(non business assets + fictitious assets)

38. Equity shares: those shares which are not having


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pref. rights are called equity shares.

39. Pref.shares: Those shares which are carrying the

pref.rights is called pref. sharesPref.rights in respect of fixed dividend. Pref.right to

repayment of capital in the even of company winding

up.

40. Leverage: It is a force applied at a particular work to

get the desired result.

41. Operating leverage: the operating leverage takes

place when a changes in revenue greater changes in

EBIT.

42. Financial leverage : it is nothing but a process of

using debt capital to increase the rate of return onequity

43. Combine leverage: it is used to measure of the total

risk of the firm = operating risk + financial risk.

44. Joint venture: A joint venture is an association of

two or more the persons who combined for theexecution of a specific transaction and divide the profit

or loss their of an agreed ratio.

45. Partnership: partnership is the relation b/w the


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persons who have agreed to share the profits of

business carried on by all or any of them acting for all.

46. Factoring: It is an arrangement under which a firm(called borrower) receives advances against its

receivables, from a financial institutions (called factor)

47. Capital reserve: The reserve which transferred from

the capital gains is called capital reserve.

48.General reserve: the reserve which is transferred

from normal profits of the firm is called general reserve

49. Free Cash: The cash not for any specific purpose free

from any encumbrance like surplus cash.

50. Minority Interest: minority interest refers to theequity of the minority shareholders in a subsidiary

company.

51. Capital receipts: capital receipts may be defined as

non-recurring receipts from the owner of the business

or lender of the money crating a liability to either of

them.

52. Revenue receipts: Revenue receipts may defined as

A recurring receipts against sale of goods in the

normal course of business and which generally the


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result of the trading activities.

53. Meaning of Company: A company is an association

of many persons who contribute money or moneysworth to common stock and employs it for a common

purpose. The

common stock so contributed is denoted in money and

is the capital of the company.

54. Types of a company:

1.Statutory companies

2.government company

3.foreign company

4.Registered companies:

a. Companies limited by shares

b. Companies limited by guarantee

c. Unlimited companiesD. private company

E. public company

55. Private company: A private co. is which by its AOA:

Restricts the right of the members to transfer of shares

Limits the no. Of members 50. Prohibits any Invitation

to the public to subscribe for its shares or debentures.

56. Public company: A company, the articles of

association of which does not contain the requisite

restrictions to make it a private limited company, is called


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a public company.

57. Characteristics of a company:

Voluntary associationSeparate legal entity

Free transfer of shares

Limited liability

Common seal

Perpetual existence.

58. Formation of company:

Promotion

Incorporation

Commencement of business

59. Equity share capital: The total sum of equity sharesis called equity share capital.

60. Authorized share capital: it is the maximum amount

of the share capital, which a company can raise for the

time being.

61. Issued capital: It is that part of the authorized capital,which has been allotted to the public for subscriptions.

62. Subscribed capital: it is the part of the issued capital,

which has been allotted to the public.


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63. Called up capital: It has been portion of the

subscribed capital which has been called up by the

company.

64. Paid up capital: It is the portion of the called up

capital against which payment has been received.

65. Debentures: Debenture is a certificate issued by a

company under its seal acknowledging a debt due by

it to its holder.

66. Cash profit: cash profit is the profit it is occurred

from the cash sales.

67. Deemed public Ltd. Company: A private company

is a subsidiary company to public company it satisfiesthe following terms/conditions Sec 3(1)3:

1.having minimum share capital 5 lakhs

2.accepting investments from the public

3.no restriction of the transferable of shares

4.No restriction of no. of members.

5.accepting deposits from the investors

68. Secret reserves: secret reserves are reserves the

existence of which does not appear on the face of

balance sheet. In such a situation, net assets position of

the business is stronger than that disclosed by the


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balance sheet.

These reserves are crated by:

1.Excessive dep.of an asset, excessive over-valuation

of a liability.2.Complete elimination of an asset, or under valuation

of an asset.

69. Provision: provision usually means any amount

written off or retained by way of providing

depreciation, renewals or diminutions in the value of

assets or retained by way of providing for any known

liability of which the amount can not be determined

with substantial accuracy.

70. Reserve: The provision in excess of the amount

considered necessary for the purpose it was originally

made is also considered as reserve Provision is chargeagainst profits while reserves is an appropriation of

profits Creation of reserve increase proprietors fund

while creation of provisions decreases his funds in the

business.

71. Reserve fund: the term reserve fund means such

reserve against which clearly investment etc.,

72. Undisclosed reserves: Sometimes a reserve is created

but its identity is merged with some other a/c or group

of accounts so that the existence of the reserve is not


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known such reserve is called an undisclosed reserve.

73. Finance management: financial management deals

with procurement of funds and their effectiveutilization in business.

74. Objectives of financial management:

financial management having two objectives that Is:

1. Profit maximization: the finance manager has to

make his decisions in a manner so that the profits of

the concern are maximized.

2. Wealth maximization: wealth maximization means

the objective of a firm should be to maximize its value

or wealth, or value of a firm is represented by the

market price of its common stock.

75. Functions of financial manager:

Investment decision

Dividend decision

Finance decision

Cash management decisions

Performance evaluation

Market impact analysis

76. Time value of money: the time value of money

means that worth of a rupee received today is different

from the worth of a rupee to be received in future.


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77. Capital structure: it refers to the mix of sources

from where the long-term funds required in a business

may be raised; in other words, it refers to the proportionof debt, preference capital and equity capital.

78. Optimum capital structure: capital structure is

optimum when the firm has a combination of equity

and debt so that the wealth of the firm is maximum.

79. WACC: it denotes weighted average cost of capital. It

is defined as the overall cost of capital computed by

reference to the proportion of each component of

capital as weights.

80. Financial break-even point: it denotes the level at

which a firms EBIT is just sufficient to cover interestand preference dividend.

81. Capital budgeting: capital budgeting involves the

process of decision making with regard to investment in

fixed assets. Or decision making with regard to

investment of money in long-term projects.

82. Pay back period: payback period represents the time

period required for complete recovery of the initial

investment in the project.


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83. ARR: accounting or average rate of return means the

average annual yield on the project.

84. NPV: the net present value of an investment proposalis defined as the sum of the present values of all future

cash in flows less the sum of the present values of all

cash out flows associated with the proposal.

85. Profitability index: where different investment

proposal each involving different initial investments

and cash inflows are to be compared.

86. IRR: internal rate of return is the rate at which the

sum total of discounted cash inflows equals the

discounted cash out flow.

87. Treasury management: it means it is defined as theefficient management of liquidity and financial risk in

business.

88. Concentration banking: it means identify locations

or places where customers are placed and open a local

bank a/c in each of these locations and open local

collection canter.

89. Marketable securities: surplus cash can be invested

in short term instruments in order to earn interest.


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90. Ageing schedule: in a ageing schedule the receivables

are classified according to their age.

91. Maximum permissible bank finance (MPBF): it isthe maximum amount that banks can lend a borrower

towards his working capital requirements.

92. Commercial paper: a cp is a short term promissory

note issued by a company, negotiable by endorsement

and delivery, issued at a discount on face value as may

be determined by the issuing company.

93. Bridge finance: It refers to the loans taken by the

company normally from a commercial banks for a short

period pending disbursement of loans sanctioned

by the financial institutions.

94. Venture capital: It refers to the financing of high-

risk ventures promoted by new qualified entrepreneurs

who require funds to give shape to their ideas.

95. Debt securitization: It is a mode of financing,

where in securities are issued on the basis of a package

of assets (called asset pool).

96. Lease financing: Leasing is a contract where one

party (owner) purchases assets and permits its views by

another party (lessee) over a specified period


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97. Trade Credit: It represents credit granted by

suppliers of goods, in the normal course of business.

98. Over draft: Under this facility a fixed limit is

granted within which the borrower allowed to overdraw

from his account.

99. Cash credit: It is an arrangement under which a

customer is allowed an advance up to certain limit

against credit granted by bank.

100. Clean overdraft: It refers to an advance by way of

overdraft facility, but not back by any tangible security.

101. Share capital: The sum total of the nominal value of

the shares of a company is called share capital.

102. Funds flow statement: It is the statement deals

with the financial resources for running business

activities. It explains how the funds obtained and how

they used.

103.Sources of funds: There are two sources of fundsInternal sources and external sources.

Internal source: Funds from operations is the only

internal sources of funds and some important points add


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to it they do not result in the outflow of funds

(a)Depreciation on fixed assets

(b)(b) Preliminary expenses or goodwill written off,Loss on sale of fixed assets

Deduct the following items, as they do not increase the

funds:

Profit on sale of fixed assets, profit on revaluation

Of fixed assets

External sources: (a) Funds from long-term loans

(b)Sale of fixed assets

(c) Funds from increase in share capital

104. Application of funds: (a) Purchase of fixed assets

(b) Payment of dividend (c)Payment of tax liability (d)

Payment of fixed liability

105. ICD (Inter corporate deposits): Companies can

borrow funds for a short period. For example 6 months

or less from another company which have surplus

liquidity. Such eposits made by one company in

another company are called ICD.

106. Certificate of deposits: The CD is a document oftitle similar to a fixed deposit receipt issued by banks

there is no prescribed interest rate on such CDs it is

based on the prevailing market conditions.


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107. Public deposits: It is very important source of short

term and medium term finance. The company can

accept PD from members of the public and

shareholders. It has the maturity period of 6 months to3 years.

108.Euro issues: The euro issues means that the issue is

listed on a European stock Exchange. The subscription

can come from any part of the world except India.

109.GDR (Global depository receipts): A depository

receipt is basically a negotiable certificate , dominated

in us dollars that represents a non-US company publicly

traded in local currency equity shares.

110. ADR (American depository receipts): Depositoryreceipt issued by a company in the USA are known as

ADRs. Such receipts are to be issued in accordance

with the provisions stipulated by the securities

Exchange commission (SEC) of USA like SEBI in

India.

111.Commercial banks: Commercial banks extend

foreign currency loans for international operations,

just like rupee loans. The banks also provided

overdraft.


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112.Development banks: It offers long-term and

medium term loans including foreign currency loans

113.International agencies: International agencies like

the IFC,IBRD,ADB,IMF etc. provide indirect

assistance for obtaining foreign currency.

114. Seed capital assistance: The seed capital

assistance scheme is desired by the IDBI for

professionally or technically qualified entrepreneurs

and persons possessing relevant experience and skills

and entrepreneur traits.

115. Unsecured l0ans: It constitutes a significant part of

long-term finance available to an enterprise.

116. Cash flow statement: It is a statement depicting

change in cash position from one period to another.

117.Sources of cash: Internal sources-

(a)Depreciation

(b)Amortization

(c)Loss on sale of fixed assets(d)Gains from sale of fixed assets

(e) Creation of reserves External sources-

(a)Issue of new shares

(b)Raising long term loans


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(c)Short-term borrowings

(d)Sale of fixed assets, investments

118. Application of cash:

(a) Purchase of fixed assets

(b) Payment of long-term loans

(c) Decrease in deferred payment liabilities

(d) Payment of tax, dividend

(e) Decrease in unsecured loans and deposits

119. Budget: It is a detailed plan of operations for some

specific future period. It is an estimate prepared in

advance of the period to which it applies.

120. Budgetary control: It is the system of managementcontrol and accounting in which all operations are

forecasted and so for as possible planned ahead, and the

actual results compared with the forecasted and planned

ones.

121. Cash budget: It is a summary statement of firms

expected cash inflow and outflow over a specified timeperiod.

122. Master budget: A summary of budget schedules in

capsule form made for the purpose of presenting in one


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report the highlights of the budget forecast.

123. Fixed budget: It is a budget, which is designed toremain unchanged irrespective of the level of activity

actually attained.

124.Zero- base- budgeting: It is a management tool

which provides a systematic method for evaluating all

operations and programmes, current of new allows for

budget reductions and expansions in a rational manner

and allows reallocation of source from low to high

priority programs.

125. Goodwill: The present value of firms anticipated

excess earnings.

126. BRS: It is a statement reconciling the balance as

shown by the bank pass book and balance shown by the

cash book.

127. Objective of BRS: The objective of preparing such

a statement is to know the causes of difference between

the two balances and pass necessary correcting oradjusting entries in the books of the firm.

128.Responsibilities of accounting: It is a system of

control by delegating and locating the


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Responsibilities for costs.

129. Profit centre: A centre whose performance is

measured in terms of both the expense incurs andrevenue it earns.

130.Cost centre: A location, person or item of

equipment for which cost may be ascertained and used

for the purpose of cost control.

131. Cost: The amount of expenditure incurred on to a

given thing.

132. Cost accounting: It is thus concerned with

recording, classifying, and summarizing costs for

determination of costs of products or services planning,

controlling and reducing such costs and furnishing ofinformation management for decision making.

133. Elements of cost:

(A) Material

(B) Labour

(C) Expenses

(D) Overheads

134. Components of total costs: (A) Prime cost (B)

Factory cost

(C)Total cost of production (D) Total c0st


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135. Prime cost: It consists of direct material direct

labour and direct expenses. It is also known as basic

or first or flat cost.

136. Factory cost: It comprises prime cost, in addition

factory overheads which include cost of indirect

material indirect labour and indirect expenses incurred

in factory. This cost is also known as works cost or

production cost or manufacturing cost.

137. Cost of production: In office and administration

overheads are added to factory cost, office cost is

arrived at.

138. Total cost: Selling and distribution overheads are

added to total cost of production to get the total cost orcost of sales.

139. Cost unit: A unit of quantity of a product, service or

time in relation to which costs may be ascertained or

expressed.

140.Methods of costing: (A)Job costing (B)Contractcosting (C)Process costing (D)Operation costing

(E)Operating costing (F)Unit costing (G)Batch costing.

141. Techniques of costing: (a) marginal costing (b)


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direct costing (c)absorption costing (d) uniform costing.

142. Standard costing: standard costing is a system

under which the cost of the product is determined inadvance on certain predetermined standards.

143. Marginal costing: it is a technique of costing in

which allocation of expenditure to production is

restricted to those expenses which arise as a result of

production, i.e., materials, labour, direct expenses and

variable overheads.

144. Derivative: derivative is product whose value is

derived from the value of one or more basic variables

of underlying asset.

145. Forwards: a forward contract is customizedcontracts between two entities were settlement takes

place on a specific date in the future at todays pre

agreed price.

146. Futures: a future contract is an agreement between

two parties to buy or sell an asset at a certain time in the

future at a certain price. Future contracts arestandardized exchange traded contracts.

147. Options: an option gives the holder of the option the

right to do some thing. The option holder option may


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exercise or not.

148. Call option: a call option gives the holder the right

but not the obligation to buy an asset by a certain datefor a certain price.

149. Put option: a put option gives the holder the right

but not obligation to sell an asset by a certain date for a

certain price.

150. Option price: option price is the price which the

option buyer pays to the option seller. It is also referred

to as the option premium.

151. Expiration date: the date which is specified in the

option contract is called expiration date.

152. European option: it is the option at exercised only

on expiration date it self.

153. Basis: basis means future price minus spot price.

154. Cost of carry: the relation between future prices and

spot prices can be summarized in terms of what isknown as cost of carry.

155. Initial margin: the amount that must be deposited in

the margin a/c at the time of first entered into future


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contract is known as initial margin.

156 Maintenance margin: this is some what lower than

initial margin.

157. Mark to market: in future market, at the end of the

each trading day, the margin a/c is adjusted to reflect

the investors gains or loss depending upon the futures

selling price. This is called mark to market.

158. Baskets : basket options are options on portfolio of

underlying asset.

159. Swaps: swaps are private agreements between two

parties to exchange cash flows in the future according

to a pre agreed formula.

160. Impact cost: impact cost is cost it is measure of

liquidity of the market. It reflects the costs faced when

actually trading in index.

161. Hedging: hedging means minimize the risk.

162. Capital market: capital market is the market it deals

with the long term investment funds. It consists of two

markets 1.primary market 2.secondary market.


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163. Primary market: those companies which are

issuing new shares in this market. It is also called new

issue market.

164. Secondary market: secondary market is the market

where shares buying and selling. In India secondary

market is called stock exchange.

165. Arbitrage: it means purchase and sale of securities

in different markets in order to profit

from price discrepancies. In other words arbitrage is a

way of reducing risk of loss caused by price

fluctuations of securities held in a portfolio.

166. Meaning of ratio: Ratios are relationships expressed

in mathematical terms between figures which areconnected with each other in same manner.

167. Activity ratio: it is a measure of the level of activity

attained over a period.

168. mutual fund : a mutual fund is a pool of money,

collected from investors, and is invested according tocertain investment objectives.

169. characteristics of mutual fund : Ownership of

the MF is in the hands of the of the


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investors MF managed by investment professionals The

value of portfolio is updated every day

170.advantage of MF to investors : Portfoliodiversification Professional management Reduction in

risk Reduction of transaction casts Liquidity

Convenience and flexibility

171.net asset value : the value of one unit of investment

is called as the Net Asset Value

172.open-ended fund : open ended funds means

investors can buy and sell units of fund, at NAV related

prices at any time, directly from the fund this is called

open ended fund. For ex; unit 64

173.close ended funds : close ended funds means it isopen for sale to investors for a specific period, after

which further sales are closed. Any further transaction

for buying the units or repurchasing them, happen, in

the secondary markets.

174. dividend option : investors who choose a dividend

on their investments, will receive dividends from theMF, as when such dividends are declared.

175.growth option : investors who do not require

periodic income distributions can be choose the growth


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option.

176.equity funds : equity funds are those that invest pre-

dominantly in equity shares of company.

177.types of equity funds : Simple equity funds Primary

market funds Sectoral funds Index funds

178. sectoral funds : sectoral funds choose to invest in

one or more chosen sectors of the equity markets.

179.index funds :the fund manager takes a view on

companies that are expected to perform well, and

invests in these companies

180.debt funds : the debt funds are those that are pre-

dominantly invest in debt securities.

181. liquid funds : the debt funds invest only in

instruments with maturities less than one year.

182. gilt funds : gilt funds invests only in securities that

are issued by the GOVT. and therefore

does not carry any credit risk.

183.balanced funds :funds that invest both in debt and

equity markets are called balanced funds.


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184. sponsor : sponsor is the promoter of the MF and

appoints trustees, custodians and the AMC with

prior approval of SEBI .

185. trustee : trustee is responsible to the investors in the

MF and appoint the AMC for managing the

investment portfolio.

186. AMC : the AMC describes Asset Management

Company, it is the business face of the MF, as it

manages all the affairs of the MF.

187. R & T Agents : the R&T agents are responsible for

the investor servicing functions, as they maintain the

records of investors in MF.

188. custodians : custodians are responsible for thesecurities held in the mutual funds portfolio.

189. scheme take over : if an existing MF scheme is

taken over by the another AMC, it is called as scheme

take over.

190.meaning of load: load is the factor that is applied tothe NAV of a scheme to arrive at the price.

192. market capitalization : market capitalization means

number of shares issued multiplied with market price


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per share.

193.price earning ratio : the ratio between the share

price and the post tax earnings of company is called asprice earning ratio.

194. dividend yield : the dividend paid out by the

company, is usually a percentage of the face value of a

share.

195. market risk : it refers to the risk which the investor

is exposed to as a result of adverse

movements in the interest rates. It also referred to as

the interest rate risk.

196. Re-investment risk : it the risk which an investor

has to face as a result of a fall in theinterest rates at the time of reinvesting the interest

income flows from the fixed income security.

197. call risk : call risk is associated with bonds have an

embedded call option in them. This option hives the

issuer the right to call back the bonds prior to maturity.

198. credit risk : credit risk refers to the probability that a

borrower could default on a

commitment to repay debt or band loans


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199.inflation risk : inflation risk reflects the changes in

the purchasing power of the cash flows

resulting from the fixed income security.

200.liquid risk : it is also called market risk, it refers to

the ease with which bonds could be traded in the

market.

201.drawings : drawings denotes the money withdrawn

by the proprietor from the business for his personal use.

202.outstanding Income : Outstanding Income means

income which has become due during the accounting

year but which has not so far been received by the firm.

203.Outstanding Expenses : Outstanding Expenses referto those expenses which have become due during the

accounting period for which the Final Accounts have

been prepared but have not yet been paid.

204.closing stock : The term closing stock means goods

lying unsold with the businessman at the end of the

accounting year.

205. Methods of depreciation :

1.Unirorm charge methods :

a. Fixed installment method


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b .Depletion method

c. Machine hour rate method.

2. Declining charge methods :

a. Diminishing balance methodb.Sum of years digits method

c. Double declining method

3. Other methods :

a. Group depreciation method

b. Inventory system of depreciation

c. Annuity method

d. Depreciation fund method

e. Insurance policy method.

206.Accrued Income : Accrued Income means income

which has been earned by the business during the

accounting year but which has not yet become due and,

therefore, has not been received.

207.Gross profit ratio : it indicates the efficiency of the

production/trading operations.

Formula : Gross profit

-------------------X100

Net sales

208.Net profit ratio : it indicates net margin on sales

Formula: Net profit

--------------- X 100


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Net sales

209. return on share holders funds : it indicates measures

earning power of equity capital.

Formula :

profits available for Equity shareholders

-----------------------------------------------X 100

Average Equity Shareholders Funds

210. Earning per Equity share (EPS) : it shows theamount of earnings attributable to each equity share.

Formula :

profits available for Equity shareholders

----------------------------------------------

Number of Equity shares

211.dividend yield ratio : it shows the rate of return to

shareholders in the form of dividends based in the

market price of the share


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Formula : Dividend per share

---------------------------- X100

Market price per share

212. price earning ratio : it a measure for determining

the value of a share. May also be used to

measure the rate of return expected by investors.

Formula : Market price of share(MPS)

-------------------------------X 100

Earning per share (EPS)

213.Current ratio : it measures short-term debt paying

ability.

Formula : Current Assets

------------------------Current Liabilities

214. Debt-Equity Ratio : it indicates the percentage of

funds being financed through borrowings; a measure

of the extent of trading on equity.

Formula : Total Long-term Debt---------------------------

Shareholders funds

215.Fixed Assets ratio : This ratio explains whether the


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firm has raised adepuate long-term funds to meet its

fixed assets requirements.

Formula Fixed Assets-------------------

Long-term Funds

216 . Quick Ratio :The ratio termed as liquidity ratio.

The ratio is ascertained y comparing the

liquid assets to current liabilities.

Formula : Liquid Assets

------------------------

Current Liabilities

217. Stock turnover Ratio : the ratio indicates whether

investment in inventory in efficiently used or not. It,

therefore explains whether investment in inventory

within proper limits or not.

Formula: cost of goods sold

------------------------

Average stock


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218. Debtors Turnover Ratio : the ratio the better it is,

since it would indicate that debts are being collected

more promptly. The ration helps in cash budgetingsince the flow of cash from customers can be

worked out on the basis of sales.

Formula: Credit sales

----------------------------

Average Accounts Receivable

219.Creditors Turnover Ratio : it indicates the speed

with which the payments for credit purchases are made

to the creditors.

Formula: Credit Purchases

- - -------------------Average Accounts Payable

220. Working capital turnover ratio : it is also known

as Working Capital Leverage Ratio. This ratioIndicates

whether or not working capital has been effectively

utilized in making sales.

Formula: Net Sales

----------------------------

Working Capital


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221.Fixed Assets Turnover ratio : This ratio indicates

the extent to which the investments in fixed assetscontributes towards sales.

Formula: Net Sales

--------------------------

Fixed Assets

222 .Pay-out Ratio : This ratio indicates what proportion

of earning per share has been used for

paying dividend.

Formula: Dividend per Equity Share

--------------------------------------------X100

Earning per Equity share

223.Overall Profitability Ratio : It is also called as

Return on Investment (ROI) or Return on Capital

Employed (ROCE) . It indicates the percentage of

return on the total capital employed in the business.

Formula :

Operating profit

------------------------X 100


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Capital employed

The term capital employed has been given different

meanings a.sum total of all assets whether fixed orcurrent b.sum total of fixed assets, c.sum total of long-

term funds employed in the business, i.e., share capital

+reserves &surplus +long term loans (non business

assets + fictitious assets). Operating profit means profit

before interest and tax

224 . Fixed Interest Cover ratio : the ratio is very

important from the lenders point of view. It

indicates whether the business would earn sufficient

profits to pay periodically the interest charges.

Formula : Income before interest and Tax

---------------------------------------Interest Charges

225. Fixed Dividend Cover ratio : This ratio is

important for preference shareholders entitled to get

dividend at a fixed rate in priority to other shareholders.

Formula : Net Profit after Interest and Tax------------------------------------------

Preference Dividend

226. Debt Service Coverage ratio : This ratio is


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explained ability of a company to make payment of

principal amounts also on time.

Formula : Net profit before interest and tax----------------------------------------

1-Tax rate

Interest + Principal payment installment

227. Proprietary ratio : It is a variant of debt-equity

ratio . It establishes relationship between the

proprietors funds and the total tangible assets.

Formula : Shareholders funds

----------------------------

Total tangible assets

228.Difference between joint venture and partner ship: In joint venture the business is carried on without

using a firm name, In the partnership, the business is

carried on under a firm name.

In the joint venture, the business transactions are

recorded under cash system In the partnership, the

business transactions are recorded under mercantilesystem. In the joint venture, profit and loss is

ascertained on completion of the venture In the partner

ship , profit and loss is ascertained at the end of each

year. In the joint venture, it is confined to a particular


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operation and it is temporary. In the partnership, it is

confined to a particular operation and it is permanent.

229.Meaning of Working capital : The funds availablefor conducting day to day operations of an enterprise.

Also represented by the excess of current assets over

current liabilities.

230.concepts of accounting :

1.Business entity concepts :- According to this concept,

the business is treated as a separate entity distinct from

its owners and others.

2.Going concern concept :- According to this concept, it

is assumed that a business has a reasonable expectation

of continuing business at a profit for an indefiniteperiod of time.

3.Money measurement concept :- This concept says that

the accounting records only those transactions which

can be expressed in terms of money only.

4.Cost concept :- According to this concept, an asset is

recorded in the books at the price paid to acquire it and

that this cost is the basis for all subsequent accounting

for the asset.


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5.Dual aspect concept :- In every transaction, there will

be two aspects the receiving aspect and the giving

aspect; both are recorded by debiting one accounts andcrediting another account. This is called double entry.

6.Accounting period concept :- It means the final

accounts must be prepared on a periodic basis.

Normally accounting period adopted is one year, more

than this period reduces the utility of accounting data.

7.Realization concept :- According to this concepts,

revenue is considered as being earned on the data which

it is realized, i.e., the date when the property in goods

passes the buyer and he become legally liable to pay.

8.Materiality concepts :- It is a one of the accountingprinciple, as per only important information will be

taken, and un important information will be ignored in

the preparation of the financial statement.

9.Matching concepts :- The cost or expenses of a

business of a particular period are compared with the

revenue of the period in order to ascertain the net profitand loss.

10.Accrual concept :- The profit arises only when there

is an increase in owners capital, which is a result of


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excess of revenue over expenses and loss.

231. Financial analysis :The process of interpreting the

past, present, and future financial condition of acompany.

232. Income statement : An accounting statement which

shows the level of revenues, expenses and profit

occurring for a given accounting period.

233.Annual report : The report issued annually by a

company, to its share holders. it containing financial

statement like, trading and profit & lose account and

balance sheet.

234. Bankrupt : A statement in which a firm is unable to

meets its obligations and hence, its assets aresurrendered to court for administration

235 . Lease : Lease is a contract between to parties under

the contract, the owner of the asset gives the right to use

the asset to the user over an agreed period of the time

for a consideration

236.Opportunity cost : The cost associated with not

doing something.

237. Budgeting : The term budgeting is used for


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preparing budgets and other producer for

planning,co-ordination,and control of business

enterprise.

238.Capital : The term capital refers to the total

investment of company in money, tangible and

intangible assets. It is the total wealth of a company.

239. Capitalization : It is the sum of the par value of

stocks and bonds out standings.

240. Over capitalization : When a business is unable to

earn fair rate on its outstanding securities.

241. Under capitalization : When a business is able to

earn fair rate or over rate on it is outstanding securities.

242. Capital gearing : The term capital gearing refers to

the relationship between equity and long term debt.

243.Cost of capital : It means the minimum rate of return

expected by its investment.

244.Cash dividend : The payment of dividend in cash

245.Define the term accrual : Recognition of revenues

and costs as they are earned or incurred . it includes

recognition of transaction relating to assets and


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liabilities as they occur irrespective of the actual

receipts or payments.

245. accrued expenses : An expense which has beenincurred in an accounting period but for which no

enforceable claim has become due in what period

against the enterprises.

246.Accrued revenue : Revenue which has been earned

is an earned is an accounting period but in respect of

which no enforceable claim has become due to in that

period by the enterprise.

247.Accrued liability : A developing but not yet

enforceable claim by an another person which

accumulates with the passage of time or the receipt of

service or otherwise. it may rise from the purchase ofservices which at the date of accounting have been only

partly performed and are not yet billable.

248.Convention of Full disclosure : According to this

convention, all accounting statements should be

honestly prepared and to that end full disclosure of all

significant information will be made.

249.Convention of consistency : According to this

convention it is essential that accounting practices and

methods remain unchanged from one year to another.


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250.Define the term preliminary expenses :

Expenditure relating to the formation of an enterprise.

There include legal accounting and share issueexpenses incurred for formation of the enterprise.

251.Meaning of Charge : charge means it is a obligation

to secure an indebt ness. It may be fixed charge and

floating charge.

252.Appropriation : It is application of profit towards

Reserves and Dividends.

253.Absorption costing : A method where by the cost is

determine so as to include the appropriate share of both

variable and fixed costs.

254.Marginal Cost : Marginal cost is the additional cost

to produce an additional unit of a product. It is also

called variable cost.

255. What are the ex-ordinary items in the P&L a/c :

The transaction which are not related to the business is

termed as ex-ordinary transactions or ex-ordinary items.Egg:- profit or losses on the sale of fixed assets, interest

received from other company investments, profit or loss

on foreign exchange, unexpected dividend received.


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256 . Share premium : The excess of issue of price of

shares over their face value. It will be showed with the

allotment entry in the journal, it will be adjusted in the

balance sheet on the liabilities side under the head ofreserves & surplus.

257.Accumulated Depreciation : The total to date of the

periodic depreciation charges on depreciable assets.

258.Investment : Expenditure on assets held to earn

interest, income, profit or other benefits.

259.Capital : Generally refers to the amount invested in

an enterprise by its owner. Ex; paid up share capital in

corporate enterprise.

260. Capital Work In Progress : Expenditure on capitalassets which are in the process of construction as

completion.

261. Convertible Debenture : A debenture which gives

the holder a right to conversion wholly or partly in

shares in accordance with term of issues.

262.Redeemable Preference Share : The preference

share that is repayable either after a fixed (or)

determinable period (or) at any time dividend by the

management.


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263. Cumulative preference shares : A class of

preference shares entitled to payment of umulates

dividends. Preference shares are always deemed to becumulative unless they are expressly made non-

cumulative preference shares.

264.Debenture redemption reserve : A reserve created

for the redemption of debentures at a future date.

265. Cumulative dividend : A dividend payable as

cumulative preference shares which it unpaid cumulates

as a claim against the earnings of a corporate before any

distribution is made to the other shareholders.

266. Dividend Equalization reserve : A reserve created

to maintain the rate of dividend in future years.

267. Opening Stock : The term opening stock means

goods lying unsold with the businessman in the

beginning of the accounting year. This is shown on the

debit side of the trading account.

268.Closing Stock : The term Closing Stock includesgoods lying unsold with the businessman at the end of

the accounting year. The amount of closing stock is

shown on the credit side of the trading account and as

an asset in the balance sheet.


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269.Valuation of closing stock : The closing stock is

valued on the basis of Cost or Market price whichever

is less principle.

272. Contingency : A condition (or) situation the

ultimate out come of which gain or loss will be known

as determined only as the occurrence or non occurrence

of one or more uncertain future events.

273.Contingent Asset : An asset the existence ownership

or value of which may be known or determined only on

the occurrence or non occurrence of one more uncertain

future events.

274. Contingent liability : An obligation to an existing

condition or situation which may arise infuture depending on the occurrence of one or more

uncertain future events.

275. Deficiency : the excess of liabilities over assets of an

enterprise at a given date is called

deficiency.

276.Deficit : The debit balance in the profit and loss a/c is

called deficit.

277.Surplus : Credit balance in the profit & loss


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statement after providing for proposed appropriation &

dividend , reserves.

278.Appropriation Assets : An account sometimesincluded as a separate section of the profit and loss

statement showing application of profits towards

dividends, reserves.

279. Capital redemption reserve : A reserve created on

redemption of the average cost:- the cost of an item at a

point of time as determined by applying an average of

the cost of all items of the same nature over a period.

When weights are also applied in the computation it is

termed as weight average cost.

280.Floating Change : Assume change on some or all

assets of an enterprise which are not attached to specificassets and are given as security against debt.

281.Difference between Funds flow and Cash flow

statement : A Cash flow statement is concerned only

with the change in cash position while a funds flow

analysis is concerned with change in working capital

position between two balance sheet dates.

A cash flow statement is merely a record of cash receipts

and disbursements. While studying the short-term

solvency of a business one is interested not only in cash


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balance but also in the assets which are easily

convertible into cash.

282. Difference Between the Funds flow and Incomestatement :

A funds flow statement deals with the financial resource

required for running the business activities. It explains

how were the funds obtained and how were they used,

Whereas an income

statement discloses the results of the business activities,

i.e., how much has been earned and how it has been

spent.

A funds flow statement matches the funds raised and

funds applied during a particular period. The source

and application of funds may be of capital as well as ofrevenue nature. An income statement matches the

incomes of a period with the expenditure of that period,

which are both of a revenue nature.

1) American Depository Receipt ADR: A negotiable

certificate issued by a U.S. bank representing a specifiednumber of shares (or one share) in a foreign stock that is

traded on a U.S. exchange. ADRs are denominated in

U.S. dollars, with the underlying security held by a U.S.

financial institution overseas, and help to reduce


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administration and duty costs on each transaction that

would otherwise be levied.

2) Global Depository Receipt

GDR: 1. A bankcertificate issued in more than one country for shares in a

foreign company. The shares are held by a foreign branch

of an international bank. The shares trade as domestic

shares, but are offered for sale globally through the

various bank branches.

3) Working Capital Cycle: The Cycle of working

capital rotates from cash, raw materials, overheads, work-

in-progress, debtors and ends with again cash.

4) Negative effects of working capital: The total current

liabilities are in excess of total current assets gives the

negative effect of working capital.

5) Depreciation: It is a measure of wearing out,

consumption or other loss of value of a depreciable assets

arising from its usage or passage of time.

6) Depletion : It is a method of providing depreciation on

wasting assets like mineral ores e.t.c.

7) Amortization: It is a method to witing off of the asset

over a period of time similar to depreciation. This method

is generally used for Intangible assets.


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8)Profit & Loss (appropriation) account : The

provisions contained in part II of schedule VI of the

companies act require that the appropriation made out ofprofit like proposed dividend, transfer to and from

reserves and other appropriations should be disclosed in

profit & loss (appropriation) a/c.

9)NPV: Net Present Value: The difference between the

present value of cash inflows and the present value of

cash outflows. NPV is used in capital budgeting to

analyze the profitability of an investment or project

10) Internal Rate of Return: It is the rate at which the

sum totals of cash inflows after discounting equals to the

discounted cash outflows. The IRR of a project is the

discount rate which makes net present value of the projectequal to zero.

11) Treatment of dividends in cash flow statements:

When we pay dividend for the investments made by the

outsiders, it is called as financing activity and taken into

consideration of cash flow from financing activity where

as the receipt of dividend in respect of investment that wemade considered in cash flow from investing activity.

12) Treatment of interest in cash flow statements:

When we pay interest on the borrowed amount, it is called


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as financing activity and taken into consideration of cash

flow from financing activity where as the receipt of

interest in respect of advances that we made considered in

cash flow from investing activity.

13)Profit & loss account Vs Cash flow statement: P &

L a/c is a period end account which gives the details of

revenue earned with that of the expenses charged shows

the net profit or loss for the period.

Cash flow statement is as on date statement which gives

the details of flow of cash through receipts and expenses

irrespective of revenues and expenditure.

14) Operating income Vs Net income: Income

generated from the regular operating activities of the

business is called operating income.

Income that is left after taking into consideration ofoperating income, expenses, non-operating income and

non-operating expenses and income taxes is called net

income.

15) Gross working capital Vs Net working capital:

The total of investments in all current assets is known as

gross working capital.Excess of total current assets over total current liabilities

is called net working capital.

16) Prospectus : It is defined as a public document


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described or issued as a prospectus and includes any

notice, circular, advertisement or other document, inviting

the public to subscribe or purchase of any shares or

debentures of a body corporate.

17) Interim dividend Vs Final dividend: Dividend

which is paid in the middle of the fiscal year or before the

due date in accordance with the provisions of the

companies act is called as Interim dividend.

Dividend paid as on due date as per the provisions of the

companies act is called final dividend. If the interim

dividend is paid then the final dividend will be paid after

excluding the interim dividend.

18)Net worth.: The total of share holders funds and

reserves and surplus after deducting fictitious assets is

called as net worth.

19) Capitalization of reserves: The process of

conversion of accumulated profits and reserves into

equity shares is called as capitalization of reserves. This is

used while issue of bonus shares.

20) P/E Ratio: It is the relationship between thecontribution and sales values. It is expressed as a

percentage.

Contribution/sales * 100 = (Sales-Variable costs)/Sales *

100.


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21) Premium on shares: When the shares are issued at a

value more than the nominal value then it is called shares

issued at premium.

22) Discount on shares: When the shares are issued at

less than the nominal value then it is called shares issued

at discount.

23) Bull market/Bear market: When stock prices are

rising for an extended period, it is called bull market

which is an opposite to that of bear market.

24) Retained Earnings: Which is nothing but the balance

carried forward in the profit and loss account to the next

year shown under reserves and surplus.

ORThe percentage of net earnings not paid out as dividends,

but retained by the company to be reinvested in its core

business or to pay debt. It is recorded under reserves and

surplus on the balance sheet.

25) Fixed asset/Financial Asset: The property of the

company which aids the production includes machinery,land, equipment and others.

The assets of the company which earns the revenue to the

company in terms of interest or dividend is called

financial asset.


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26) Sunk costs: Historical costs incurred in the past are

known as sunk costs.

27) SEBI Vs SEC: SEBI: it is called as the stock

exchange board of India which is regulatory authority in

India established under the act to safeguard the interests

of the shareholders.

SEC: It is called as the Securities exchange and

commission act which is a regulatory authority in USA

established under the act similar to that of SEBI in India.

28) Intangible Assets Vs Fictious Assets

Intangible Assets: These are the assets which are useful

for the appreciation of the business and helps for the

growth of the business but they are not tangible like Good

will, patents, trademarks e.t.c.Fictitious Assets: These are the debit balances of

expenditure which are treated assets to be written off over

a period of time like preliminary expenditure written off,

miscellaneous expenditure written off e.t.c.

29) Gross Profit Vs Net Profit: The surplus balances in

the trading account which is carried forward to the P&La/c is called as the Gross profit which is arrived from

trading or production activities.

The surplus balance in the P&L account which is

reflected in the balance sheet is called as Net profit


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arrived after taking into account of operating and non-

operating revenues, operating and non-operating

expenses.

30) Equity Vs Preferred: Equity holders are those who

are the real owners of the company and are entitled to

ownership rights, preferred holders are those who are

entitled to preferential rights upon the equity holders in

terms of dividends and the distribution of assets at the

time of liquidation.

31) Preliminary Expenditure: Expenditure incurred

before the incorporation of the company is called as

preliminary expenses.

32) Cash flow: It is a statement which gives the details

about the cash generated from various activities likeoperating, investing and financing and the cash expended

on such activities during the period

33) Minority interest: **Paid up equity capital held by

outsider plus share of reserves and surplus on the date of

balance sheet

A significant but non-controlling ownership of less than50% of a company's voting shares by either an investor or

another company

34) Private vs. public: Private ltd is registered company


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which is limited by shares and limited by its no. of

members and prohibits to publish the prospectus

Public is a registered company which is opposite to that as

private company

35) Goodwill: It is treated to be intangible assets which is

purchased for the appreciation as the business that is

acquired and it is amortized over a period of time

36) GAAP: These are generally accepted accounting

principles called as accounting standards which are to be

followed while prepares the financial statements like

profit and loss a\c and balance sheet

37) Market capitalization: It is total value as all the

outstanding shares with that as the current market price as

the share

38) Annual report: It is the report which is to be field

with the register and companies details the financial

results as the company for the year and the preceding

year, the report consists as companys projects and other

year end statistics

38) IPO: When a company initial listing with the stock

exchanges board of India. Then it is called as Initial

public offering.


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39) SM\AGM\EGM: SM: Every company limited by

share and every company limited by guarantee and having

a share capital shall with in a period of not less that one

month or more than six months from the date of which thecompany is entitled to commence business , hold a

general meeting of the members of the company. This is

called as Statuatory meeting.

AGM: Every company shall in each year hold in addition

to any other meeting a general meeting as its annual

general meeting and shall specify the meeting as such in

the notice calling it.

EGM: any meeting other than the two above is called

E.G.M. It is conducted for special and urgent business.

40) QUORUM: The minimum no of members who must

be present in order to constitute a valid meeting and

transact business there off.

5 members in the case of a public company.

2 in the case of public company.

Subsidiary Company: It is a registered company whose

maximum share is held by holding company.

Prepaid Vs O/s Exp: Any expenditure which is paid in

advance is called as prepaid expense. It is treated as an

asset and deducted from the current expenditure.


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Any Expenditure which is payable shall be treated as o/s

expenses and it is treated as current liability in the balance

sheet.

Operating Vs Non-Operating: Operating Exp are those

which are incurred in the regular course of business for

generating revenues.

Non-Operating Exp are one time Expenditure which are

expended not for regular course of business.

NAV-Net Assets Value: The value of assets applicable

to one unit. This is calculated as total assets minus all

prior charges and divided by the member of the total

outstanding units.

AOA Vs MOA: MOA is the most important document

which is called as charter of the company and regulates

the external affairs of the company.

AOA specifies the rules regulations and bye-laws for the

internal management of the affairs of the company.

Minority Interest: The portion of net assets of subsidiaryonthe date of consolidation not controlled by the parent

itself or through its subsidiary.

Paid up share capital held by the outsider (outside group)

+ share of reserves.


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A significant but non-controlling ownership of less than

50% of a company's voting shares by either an investor or

another companyCapital Employed: It is defined as the amount which is

invested in the business to generate production and

revenue with the aid of such capital employed capital. It is

calculated as

Share capital + Reserves & Surplus + Debenture & long

term debtfictituous assets

Or Fixed Assets + intangible assets + Net working capital.

Deferred tax asset/ liability: Difference between the tax

expense which is calculated on accrual basis and current

tax liability to be paid for particular period as per income

tax act is called deferred tax asset/liability.

Call Option: A contract giving the holders a right to buy

an underlying security at a specified price with in a

specified time period.

Diversification: An investment strategy to reduce risks

by investing in securities, common stock, debenture or

bonds of several companies.

Share Warrant: A Share warrant is a bearer document

issued only by a public company to the holder on the

approval of central govt. it is negotiable without any


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instrument of transfer.

Rights issue: Where a company proceeds to issue any

further shares after the expiry ofTwo years from the date of incorporation of the company

One year after the first allotment of shares. Which ever is

earlier.

Such an allotment should be made to the shareholders of

the company in proportion to the capital paid.

Reserves Vs Provisions: Reserves are amounts

appropriated out of profit which are not intended to meet

any liability contingency, commitement or diminuition in

the value of assets known to exit at the date of balance

sheet.

Amounts calculated or transferred form profits to make

food the diminuition in asset values due to the fact thatthat some of them have been lost or destroyed as a result

of some natural calamities or debts have proved to be

irrecoverable are also described as provisions.

Revenue Reserves: Represents profits that are available

for distribution to shareholders held for the time being or

any on or more purpose.

Capital Reserve: A capital reserve represents surplus of

profit earned in respect of certain types of transactions

like sale of fixed assets at a price in excess of cost


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realization of profits on issue of forfeited shares or

balances. It generally used for writing down fictituous

assets or losses for issuing bonus shares.

Capital redemption reserve: When there is redemption

of redeemable preference shares out of accumulated

profit. It will be necessary to transfer to the CRR account

an amount equal to the amount repaid on the redemption

of preference shares on a/c of face value less proceeds of

a fresh issue of capital made for the purpose of

redemption.

NPL Vs NPA: An asset shall be treated as non

performing when income on it is not received for certain

period.

A loan amount is said to be non performing when the

interest and the principle amount is not received forcertain period.

Share is one of a finite number of equal portions in the

capital of a company, entitling the owner to a proportion

of distributed, non-reinvested profits known as dividends

and to a portion of the value of the company in case ofliquidation

Bank reconciliation allows companies or individuals to

compare their account records to the bank's records of


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their account balance in order to uncover any possible

discrepancies

Bankruptcy is a legally declared inability or impairmentof ability of an individual or organizations to pay their

creditors.

Cash flow is a term that refers to the amount of cash being

received and spent by a business during a defined period

of time, sometimes tied to a specific project.

Measurement of cash flow can be used

Preferred stock differs from common stock in that it

typically does not carry voting rights but is legally

entitled to receive a certain level of dividend payments

before any dividends can be issued to other shareholders.

Retained earnings refer to the portion of net income

which is retained by the corporation rather than

distributed to its owners. Similarly, if the corporation

makes a loss, then that loss is retained. Retained earnings

are cumulative from year to year.

American Depositary Receipt (or ADR) representsownership in the shares of a foreign company trading on

US financial markets

Nifty, an index for large cap stocks on the National Stock


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Exchange of India

Accounting is the discipline of measuring,

communicating and interpreting financial activity.Accounting is also widely referred to as the "language of

business".[

ROE It measures a firm's efficiency at generating profits

from every dollar of net assets (assets minus liabilities),

and shows how well a company uses investment dollars to

generate earnings growth.

ROCE It basically can be used to show how much a

business is gaining for its assets, or how much it is losing

for its liabilities

Finance means the study of different ways in whichindividuals, businesses and organizations raise and

allocate monetary resources and use the same for business

purposes keeping the risks involved in mind

Accounts Related Questions:

what are the models of valuation of thecompany

explain about APP in SAP fico module?

WHAT IS SECONDARY TRACKING FLEX

FIELD QUALIFIER AND HOW IT IS


68/68

USED?

WHAT IS SECONDARY TRACKING FLEX


USED?WHAT IS SECONDARY TRACKING FLEX


USED?

What is exact difference b/w Accounts and

finance

IPO

accounts and finance material

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