Cheque: A bill of exchange
drawn on a specified banker and payable on demand.
Stale Cheque: A stale cheque
means not valid of cheque that means more than six months the cheque is not
valid.
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.
Matching concept: Matching means requires proper matching of
expense with the revenue.
Capital income: The term capital income means an income which does
not grow out of or pertain to the running of the business proper.
Revenue income: The income, which arises out of and in the course
of the regular business transactions of a concern.
Capital expenditure: It
means an expenditure which has been incurred for the purpose of obtaining a long
term advantage for the business.
Revenue expenditure: An expenditure that incurred in the course of
regular business transactions of a concern.
Differed revenue expenditure: An expenditure, which is incurred during an
accounting period but is applicable further periods also. Eg: heavy
advertisement.
Bad debts: Bad debts denote the amount lost from debtors to whom
the goods were sold on credit.
Depreciation: Depreciation
denotes gradually and permanent decrease in the value of asset due to wear and
tear, technology changes, laps of time and accident.
Fictitious assets: These are assets not represented by tangible
possession or property. Examples of preliminary expenses, discount on issue of
shares, debit balance in the profit And loss account when shown on the assets
side in the balance sheet.
Intangible Assets: Intangible assets mean the assets which is not
having the physical appearance. And it’s have the real value, it shown on the
assets side of the balance sheet.
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, therefore, has not been received.
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.
Suspense account: The suspense account is an account to which the
difference in the trial balance has been put temporarily.
Depletion: It implies removal of an available but not replaceable
source, Such as extracting coal from a
coal mine.
Amortization: The process of writing of intangible assets is term
as amortization.
Dilapidations: The term dilapidations to damage done to a building
or other property during tenancy.
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)
Equity shares: Those shares which are not having pref. rights are
called equity shares.
Pref.shares: Those shares which are carrying the pref.rights are called
pref. shares Pref.rights in respect of fixed dividend. Pref.right to repayment
of capital in the event of company winding up.
Leverage: It is a force
applied at a particular work to get the desired result.
Operating leverage: The operating leverage takes place when a
changes in revenue greater changes in EBIT.
Financial leverage: It is
nothing but a process of using debt capital to increase the rate of return on
equity
Combine leverage: It is used to measure of the total risk of the
firm = operating risk + financial risk.
Joint venture: A joint
venture is an association of two or more the persons who combined for the execution
of a specific transaction and divide the profit or loss their of an agreed
ratio.
Partnership: Partnership is the relation b/w the persons who have
agreed to share the profits of business carried on by all or any of them acting
for all.
Factoring: It is an
arrangement under which a firm (called borrower) receives advances against its receivables,
from financial institutions (called factor)
Capital reserve: The reserve which transferred from the capital
gains is called capital reserve.
General reserve: the reserve which is transferred from normal
profits of the firm is called general reserve.
Free Cash: The cash not for any specific purpose free from any encumbrance like surplus cash.
Minority Interest: Minority interest refers to the equity of the
minority shareholders in a subsidiary company.
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.
Revenue receipts: Revenue receipts may defined as “A recurring receipts
against sale of goods in the normal course of business and which generally the result
of the trading activities”.
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