1) The document defines key terms related to accounting, financial statements, stocks and shares, and derivatives. It provides definitions for terms like bookkeeping, balance sheet, assets, liabilities, equity, income statement, stocks, shares, futures, and options.
2) Accounting terms covered include cost accounting, tax accounting, auditing, and creative accounting. Financial statements defined include the balance sheet, income statement, and cash flow statement.
3) The document also defines terms related to stocks, shares, indexes, mutual funds, and the stock market. It provides clarity on common stock, preferred stock, bonds, and securities.
4) Derivatives are defined as financial instruments whose price is based on
1) The document defines key terms related to accounting, financial statements, stocks and shares, and derivatives. It provides definitions for terms like bookkeeping, balance sheet, assets, liabilities, equity, income statement, stocks, shares, futures, and options.
2) Accounting terms covered include cost accounting, tax accounting, auditing, and creative accounting. Financial statements defined include the balance sheet, income statement, and cash flow statement.
3) The document also defines terms related to stocks, shares, indexes, mutual funds, and the stock market. It provides clarity on common stock, preferred stock, bonds, and securities.
4) Derivatives are defined as financial instruments whose price is based on
1) The document defines key terms related to accounting, financial statements, stocks and shares, and derivatives. It provides definitions for terms like bookkeeping, balance sheet, assets, liabilities, equity, income statement, stocks, shares, futures, and options.
2) Accounting terms covered include cost accounting, tax accounting, auditing, and creative accounting. Financial statements defined include the balance sheet, income statement, and cash flow statement.
3) The document also defines terms related to stocks, shares, indexes, mutual funds, and the stock market. It provides clarity on common stock, preferred stock, bonds, and securities.
4) Derivatives are defined as financial instruments whose price is based on
1) The document defines key terms related to accounting, financial statements, stocks and shares, and derivatives. It provides definitions for terms like bookkeeping, balance sheet, assets, liabilities, equity, income statement, stocks, shares, futures, and options.
2) Accounting terms covered include cost accounting, tax accounting, auditing, and creative accounting. Financial statements defined include the balance sheet, income statement, and cash flow statement.
3) The document also defines terms related to stocks, shares, indexes, mutual funds, and the stock market. It provides clarity on common stock, preferred stock, bonds, and securities.
4) Derivatives are defined as financial instruments whose price is based on
BOOKKEEPING - writing down the details of transactions (debits and credits)
ACCOUNTING – preparing financial statements showing income and expenditure, assets and liabilities MANAGERIAL ACCOUNTING – preparing information that will allow a business to make decisions, plan future operations and develop business strategies COST ACCOUNTING – calculating all the expenses involved in producing something, including materials, labour and all other expenses TAX ACCOUNTING – calculating how much an individual or a company will have to pay to the government (and trying to reduce this to a minimum) AUDITING – inspection and evaluation of accounts by a second set of accountants 'CREATIVE ACCOUNTING' – using all available accounting procedures and tricks to disguise the true financial position of a company BALANCE SHEET - the financial statement detailing what a company owns and what it owes on particular date (the last day of an accounting period) PROFIT AND LOSS ACCOUNT (GB) OR INCOME STATEMENT (US) -the financial statement showing earnings(income) and expenditure, as well as the profits earned and losses made over an accounting period ASSETS = liabilities + owners’ equity CASH FLOW STATEMENT OR FUNDS FLOW STATEMENT OR SOURCE AND APPLICATION OF FUNDS STATEMENT- the financial statement showing the sources (cash inflows) and the applications of funds (cash outflows), that is money coming into and going out of a business between balance sheet dates OVERHEADS - fixed costs that include rent, salaries, utilities, etc., that is the various expenses of operating a business that cannot be charged to any product, process or department. CREDITOR – a person, organization or a company to whom the money is owed DEBTOR - a person, organization or a company that owes money CURRENT LIABILITIES - debts that must be paid within a year CURRENT ASSETS – types of assets such as cash, stock or debtors LONG-TERM LIABILITIES - debts that must be paid after at least twelve months MORTGAGE - a type of loan whose collateral is usually a property. INTANGIBLE ASSETS - a type of assets whose value is difficult to quantify or turn into cash, such as goodwill, patents, copyrights and trade marks. Assets – liabilities = OWNERS’ EQUITY/SHAREHOLDERS’ CAPITAL INCOME OR REVENUE OR EARNINGS - all the money received by a person or a company during a given period (wages, salaries, rent, business profits, dividends, etc.), minus the cost of sales, operating expenses, and taxes DEBTORS (GB) OR ACCOUNTS RECEIVABLE (US) – the sums of money owed to a company by its customers CREDITORS (GB) OR ACCOUNTS PAYABLE (US) - the sums of money owed by a company to its suppliers or lenders Revenue – costs = PROFIT DEPRECIATION (GB) OR AMORTIZATION (US) - the reduction in value of a fixed asset during the years it is in use (charged against profits) LIQUIDITY – having assets that can easily be turned into cash RETAINED PROFIT - The profit that is used for future growth or bad debt charges RENT - money paid for the use of a house or a flat. STOCK (GB) OR INVENTORY (US) - (the value of) raw materials, work in progress, and finished products stored ready for sale. TURNOVER - the amount of business done by a company over a year ASSETS – anything owned by a business that can be used to produce goods or pay liabilities LIABILITIES – anything that a business owes, that is money that a company will have to pay to someone else in the future, including taxes, debts, interest and mortgage payments, and so on SOLVENCY – having money to pay your debts at the time they must be paid ¸ FIXED TANGIBLE ASSETS – types of assets such as buildings, land and machinery EXPENDITURE – the total amount of money that a company spends during a particular period of time, showing costs and overheads FIXED COSTS – costs that do not vary according to the volume produced, such as administrative costs, labour and storage VARIABLE COSTS – costs which depend on the volume of output produced by a business, such as advertising, distribution, R&D, production SOURCES OF FUNDS OR CASH INFLOWS – owners’ own funds from the issuing of shares, trading profits, the sales of assets or depreciation provisions APPLICATIONS OF FUNDS OR CASH OUTFLOWS – purchases of fixed and financial assets, running expenses, interest payments, taxation and payment of dividends, and in a bad year, trading losses CASH DEFICIT – a situation in accounting when there are more cash outflows than inflows CASH SURPLUS - a situation in accounting when there are more cash inflows than outflows NET – an amount after things, such as tax, have been taken away GROSS – a total amount without anything being taken away WORKING CAPITAL OR FUNDS – the stock of money (cash and liquid resources) required by a business to continue producing or trading SHARE CAPITAL - capital that a company has from investors who have bought shares RESERVES – earlier profits not paid out SHAREHOLDERS’ FUNDS OR OWNERS’ EQUITY – money in a company that legally belongs to shareholders including share capital, retained profit and other reserves in the form of dividends Stocks and shares TO ISSUE - to offer securities for sale to the general public TO UNDERWRITE - to guarantee to buy all the securities at an agreed price on a certain day, if they cannot be sold to the public STOCK/SHARE INDEX - an official list of the average price of shares in a group of companies on a particular stock market TO DEFAULT- to fail to repay a loan at the scheduled time GILTS - long-term bonds issued by the British government PORTFOLIO - an investor’s collection/selection of securities MUTUAL FUND (US) OR UNIT TRUST (GB) - a company that spreads investors’ capital over a variety of securities INSIDER TRADING - the use of information not known to the public to make a profit out of buying or selling shares MARKET-MAKER- a wholesaler in stocks and shares who deals with brokers BLUE CHIP SHARE - a share in a large company or corporation that is considered to be a secure investment FLOTATION (GB) OR INITIAL PUBLIC OFFERING (US) - offering company shares for sale to the public for the first time EQUITIES- another name for stocks and shares, because all the stocks and shares of a company have an equal nominal value BONDS - securities issued by companies, governments and financial institutions when they need to borrow money SECURITIES - investments in stocks, shares and bonds; certificates to show that someone owns stocks, shares or bonds; saleable papers, traded on stock exchanges, that yield an income (dividend, interest, etc.) STOCKS- securities bought on the stock exchange which belong to companies listed on the stock exchange SHARES- securities which include both stocks and privately held stakes in small firms that are not publicly traded, pay dividends and enable the bearer to own a part of the company NASDAQ- an electronic exchange, a system which provides quotations via computer for the US electronic trading market INSITUTIONAL INVESTORS- financial organizations such as pension funds and insurance companies which own most of the shares of all leading companies (over 60% and rising) NOMINAL VALUE, PAR VALUE OR FACE VALUE - the stated value of a bond, share etc when it is issued, that is sold for the first time SPECULATORS – people who buy goods, shares, property, or foreign currency in the hope of making a profit NIKKEI AVERAGE – index of share prices on the Tokyo Stock Exchange DOW JONES INDEX – index of share prices on the New York Stock Exchange DAX - index of share prices on the Frankfurt Stock Exchange CAC - index of share prices on the Paris Stock Exchange FTSE - index of share prices on the London Stock Exchange BANKRUPT– to be insolvent, that is unable to pay debts TO LIQUIDATE – to sell all the assets of a bankrupt business to repay creditors DIVIDEND – a proportion of the annual profits of a limited company, paid to shareholders VENTURE CAPITAL – money invested in a possibly risky new business ASSETS – everything of value owned by a company that can be used to produce goods, pay liabilities or sold PREMISES – the place in which a company does business: an office, shop, workshop, factory, warehouse, and so on CREDITOR – a person or an organization to whom money is owed (for goods or services rendered, or as repayment of a loan) STOCKBROKER – a person who can advise investors and buy and sell shares for them BEAR – a person who thinks the prices of shares are going to fall, and therefore sells shares hoping to buy them back at lower price BULL – someone who thinks that prices of shares are going to rise, and who will therefore keep them or buy investments STAG - someone who buys new share issues, hoping to resell them at a profit ORDINARY SHARES (GB) OR COMMON STOCK (US) – fixed units of a company’s share capital that usually pay a dividend and have voting rights ANNUAL GENERAL MEETING (GB) OR ANNUAL STOCKHOLDERS MEETING (US) – a yearly meeting to which companies have to invite all shareholders ANNUAL REPORT – sent by all the publicly quoted companies to their shareholders after each financial year, before the AGM PUBLIC LIMITED COMPANY (PLC)/A LISTED COMPANY– a successful, established company that is allowed to offer its shares for sale on the open stock market PRIVATE LIMITED COMPANY – a company that cannot offer its shares to the public; their owners have to raise capital themselves, or borrow from friends, banks or venture capital institutions LIMITED LIABILITY – responsibility for debts up to the value of the company’s share capital UNLIMITED LIABILITY- the legal obligation to pay all one’s debts, if necessary by the sale of one’s personal assets LIMITED COMPANY OR CORPORATION – a company that is only liable for the amount of capital that shareholders have invested, and not for debts greater than this amount Derivatives DERIVATIVES - a general name for all financial instruments whose price depends on underlying assets such as stocks, bonds, commodities, currencies, interest rates and market indices. OPTIONS - contracts giving the right, but not the obligation, to buy (call option) or sell (put option) an asset (a security, a currency, or a commodity) at a fixed, agreed-upon price (strike price) during a certain period of time, or on a specific date FUTURES - contracts to buy or sell fixed quantities of a commodity, currency, or financial asset at a future date, at a price fixed at the time of making the contract SPECULATION - buying securities or other assets in the hope of making a capital gain by selling them at a higher price (or selling them in the hope of buying them back at a lower price) HEDGING - making contracts to buy or sell a commodity or financial asset at pre-arranged price in the future as a protection or ‘insurance’ against price changes COMMODITIES - raw materials or primary products (metals, cereals, coffee, etc.) that are traded on special markets SPOT MARKET- a market on which commodities, currencies and financial securities are traded for immediate delivery at their current price FUTURES MARKET - a market on which contracts are made to buy commodities, currencies, and various financial assets, at a future date, but with the price fixed at the time of the deal CURRENCY SWAP – an agreement between two parties who exchange principal and fixed rate interest payments on a loan in one currency for principal and fixed rate interest payments on an equal loan in another currency INTEREST RATE SWAP - an agreement to exchange future interest payments with another company or financial institution, e.g. a floating rate loan for a fixed interest rate loan