Archive for Accounting Terms
November 19, 2008 at 5:14 am · Filed under Accounting Terms
Dictionary of International Accounting Terms (International Dictionary Series): John Clark
* Over 3,500 internationally recognized accounting terms
* Concise, clear definitions
A reference work that encompasses all the most commonly used international accounting and financial reporting terms and standards. It includes terms in use for bank accounting, corporate accounts, and financial statement analysis. An invaluable source for non-accountants who need to interpret analysis and financial reports produced by accounting specialists, practitioners seeking to keep abreast of new terms and for all students of finance and accounting. Covers accounting terms and principles from basic balance sheet terminology through to advanced cash flow formulas.
http://theebooksreview.com/dictionary-of-international-accounting-terms-international-dictionary-series-john-clark/
November 17, 2008 at 6:43 am · Filed under Accounting Terms
Different fields of accounting study and make use of some terms that are not easy to be understood by others.
If you happen to be an accounting student or a professional CPA, you know all the different terms that are used in accounting. One and perhaps the most popular term to the average person is profit loss.
So, do you know what this term means? To begin with, you must determine what profit is and what it means. Profit can be net earnings or net income, either one. Businesses can sell services or products.
Profits will come from the sales of these services and products. If the cost of running the business is controlled, it can add up to profits.
Profits are also called ROI for some and return on investment for others. However, this term is often limited to securities like bonds or stocks.
But still, some companies use ROI to mean short or long term business outcomes. AS well the taxable income is another term for profit.
The profits loss of a certain company or individual is determined by the finance professionals through accounting. They can determine what made the profits as well as the losses.
Accountants form some sort of business equation in order to justify the profits losses of a business. In this manner, they can easily tell the net worth of a company.
It seems that by simply defining one accounting term, it eventually leads to defining other terms as well. Net worth is another term that is very difficult to understand.
It refers to the resulting amounts after deducting the liabilities or debt, long and short term of a company from the assets. Private companies refer to net worth as the owner equity.
Why the owner equity? Well, after deducting all the liabilities, what is left basically belongs to the owner. In the case of public companies, the profit of the business is returned as dividends to shareholders.
As you can see, before owner or shareholders of a company can take hold of the profits, all liabilities must be deducted first.
Every business attempts to get a good and positive figure because that means profit to them; if not, the business has a loss. Societies and economies are built on profit.
However, there are many times that businesses incurs losses. Consumer habits and purchasing trends change. Because of this fact, it is impossible to foresee the future of a companys performance at all times.
How do you determine if a business is at a loss? This is understandable and even those of us who have no background in accounting know what it means.
All liabilities will be taken from the assets and if this results in a negative amount, then the business has a loss.
The accountant staff of the company can pursue effective measures to bring the business back to a profitable situation.
If the business has efficient and effective accounting pros, the business can improve and move back to the plus column in the near future.
However arguing that an accounting staff is needed to ensure the company has success is an invalid argument. With or without them, the success of the business is not guaranteed. So the owner of the business should choose a very good accounting staff.
By doing this all the financial transactions and decisions are noted and studied. Only then can the company decide proper routes to take in its quest to return to the profit column..
Therefore profit loss is just a simple accounting term. Aside from this term, you will also learn about net earnings, net income, net worth, dividends, etc.
About the author of this article:
jim woodall has 49years business exp. he is involved w/internet and affiliate marketing. get your free must have ebooks no obligation visit his site http://freegiveaways.jwoodl.com/index.htm the accountancy career website is a must visit
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http://www.iula.org/accounting-terms-profit-loss-do-you-know-the-others-18764/
November 14, 2008 at 2:14 am · Filed under Accounting Terms
Microfinance institutions normally incur three types of costs while delivering financial services, viz. operating costs, risk costs, and cost of funds. Thus informs ‘Technical Guide on Accounting for Microfinance Institutions’ (www.icai.org).
Operating costs are incurred by the MFIs (microfinance institutions) in delivering credit to the clients including visits to the clients, completing paperwork, disbursing loans and collecting repayments, the publication explains. These costs include ‘the cost of minimising risk through monitoring and follow-up of disbursed loans, exercising internal control and undertaking external audit of the MFIs.’
Risk costs, which are the provisioning expenses to meet possible losses, represent non-cash operating expenses, and are the cost of portfolio losses. And the third type, the cost of funds, is the cost incurred in borrowing or raising funds for on-lending to microfinance clients.
Instructive material.
Data bank
The Reserve Bank of India is known for meticulous collection, analysis and dissemination of data on various aspects of the Indian economy, and these are published in the ‘Currency and Finance’ reports, reminisces V.V. Bhatt in ‘Perspectives on Development’ (www.academicfoundation.com).
“It is somewhat surprising that even the Government of India did not appreciate and acknowledge its reliance on the data published by the Reserve Bank,” he adds. “It is amazing that I.G. Patel, who relied on Reserve Bank data submitted to him by his staff, did not even mention how useful these data were in his memoirs on economic policy; and not even a word about the research done in the Reserve Bank and published in its Bulletins.”
In one of the chapters, the author observes that TTK (T.T. Krishnamachari, former Finance Minister) was responsible for two bright ideas: the setting up of the IDBI and the UTI. “At this time, he also suggested that it would be worthwhile to work on incomes policy…”
Engaging account of economic importance.
Cost function
The cost function is the single most useful tool for studying the economic behaviour of a firm, says Hal R. Varian in ‘Microeconomic Analysis,’ third edition (www.vivagroupindia.com). The cost function summarises all economically relevant information about the technology of the firm, he argues.
Quite boldly and innovatively, the book opens with a chapter on ‘technology,’ starting by stating that the simplest and most common way to describe the technology of a firm is the production function.
It is usually most satisfactory to think of the inputs and outputs as being measured in terms of flows: a certain amount of inputs per time period are used to produce a certain amount of outputs per unit time period, Varian explains.
“It is a good idea to explicitly include a time dimension in a specification of inputs and outputs. If you do this you will be less likely to use incommensurate units, confuse stocks and flows, or make other elementary errors…”
Prescribed study.
BookPeek.blogspot.com
http://www.hindu.com/thehindu/holnus/006200811131401.htm
November 10, 2008 at 7:39 am · Filed under Accounting Terms
In terms of the choice of questions, candidates appearing under the new syllabus are better off than those who took the exams under the old syllabus.
Under the current pattern, the student has the choice of leaving out one of the six questions and, among them, there is a further choice in one of the questions.
Here’s a review of the coverage of the syllabus:
Old syllabus: Consolidated balance sheet — 20 marks; accounting standards — 42 marks; amalgamation — 16 marks; value-added statement — 10 marks; fund accounting — 8 marks; HR accounting — 4 marks; total — 100 marks.
New syllabus: Consolidated balance sheet — 16 marks; accounting standards — 41 marks; amalgamation — 32 marks; value-added statement — 8 marks; NAV/buyback of shares — 16 marks; replacement analysis — 8 marks; market value — 4 marks; total — 125 marks.
Comments
The coverage of the syllabus is fair and reasonable. Most of the questions in the November 2008 exam are from the past question papers, which are found in the study materials and the revision test papers.
In fact, 70 per cent of the questions can be directly traced to the illustrations from the study material, with slight modification of the numbers. None of the questions was vague.
A student preparing mainly from the study material and revision test papers would have had the advantage of being able to successfully attempt all the questions. Though the paper appeared a bit long, it should not have posed any problem for a well-prepared student.
As expected, the major part of the paper laid emphasis on accounting standards. Including questions on the applicability of accounting standards and the convergence with IFRS is a welcome measure and a step in the right direction.
http://www.thehindubusinessline.com/mentor/2008/11/10/stories/2008111050520700.htm
