Professional Documents
Culture Documents
1
www.BankExamsToday.com
General
Awareness
For SBI, IBPS and other Govt exams
Ramandeep Singh
B.com (PU), MBA (PAU)
Ramandeep Singh
2
Awards in India
Here are some awards which are given to the celebrities in India:
Award Type Name of Awards
Music AwardsMusic director, lyricists, male/female vocalists, song of the year and
album of the year
Sports
Awards
MAKA Award, Dronacharya Award,Dhyan Chand Award,Rajiv Gandhi
Khel Ratna Award
Civillian
Award
Bharat Ratna, Padma Vubhushan, Padma Bhushan and Padma Shri
Literacy
Awards
Ananda Purashkar, The Hindu Literary Prize,The Rabindra Puraskar and
Vayalar Awards
Gallantry
Awards
Param Vir Chakra, Vir Chakra and Mahavir Chakra
Bollywood
Awards
Filmfare Awards, OSCAR, Best Film, Best Male Debut, Best Supporting
Actor, Best Director, Best Comedian, Best Villain, Dadasaheb Phalke
Award
Achievements 2014
All the latest achievements related to any Indian Celebrity is cover in this section.
From below you may get all the latest happenings and news related to prizes and
honours which are received or will receive in the session 2014.
Padma Awards Winners List for the year 2014
Padma Vibhushan
Dr. Raghunath A. Mashelkar, Science and Engineering
Shri B.K.S. Iyengar, Others-Yoga
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International Organizations and their
Headquarters
Organisation Headquarters
United Nations Organisation New York
United Nations Childrens' Fund (UNICEF) New York
United Nations Population Fund (UNFPA) New York
United Nations Conference on Trade and Development
(UNCTAD)
Geneva
World Health Organisation Geneva
International Labour Organisation Geneva
International Committee of the Red Cross Geneva
World Trade Organisation Geneva
World Meteorological Organisation Geneva
World Intellectual Property Organization Geneva
International Standards Organisation Geneva
United Nations Educational Scientific and Cultural Organisation
(UNESCO)
Paris
Organisation for Economic Cooperation and Development
(OECD)
Paris
United Nations Industrial Development Organization (UNIDO) Vienna
International Atomic Energy Agency Vienna
Organisation of Petroleum Exporting Countries (OPEC) Vienna
International Monetary Fund (IMF) Washington DC
World Bank Washington DC
Amnesty International London
International Maritime Organisation London
Commonwealth of Nations London
International Court Of Justice The Hague
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Functions of Banks
Primary Functions
Accepting deposits
Most important function of a bank is to mobilize public funds. Bank provides safe
custody as well as interest to the depositors.
Saving deposit
Saving deposit account meant for those people who wants to save for future needs
and uncertainties. There is no restriction on number and amount of withdrawals.
Bank provides cheque book, ATM cum debit card and Internet banking facility.
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Loans
Banks providing loans for various kinds of short term as well as long term needs.
Borrower pay back the loan in installments.
Discounting bills
In normal day to day business, sellers sends bills to buyer whenever they sell their
products and it is mentioned in bill to make payment in stipulated time. Lets take
it 30 days. In such conditions seller may discount the bill from bank for some
fees. In such situation bill discounting acts as short term loan. In case the buyer or
the drawer defaults, bank send the bill back to seller to drawer so that he may take
legal action against drawee or buyer.
Secondary functions
Agency functions
Funds transfer
Cheques collection
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What is an NRE account?
NRE Account stands for Non-Resident (External) Account.
The NRE account can be opened by Non-Resident Indians (NRIs). The account
can be operated individually or jointly. Persons of Indian Origin are also eligible
for the account. In case of NRE accounts, nomination can be made for NRI or
PIO resident only.
The NRE account gives an opportunity to non-resident Indians to deposit money
in Indian Banks.
There could be multiple type of accounts under NRE. These include: Saving
Fund, Current Account , Recurring Deposit, or Term Deposit. The funds under
NRE are maintained in Indian Rupees as the currency.
The fund amount including the principal as well as the interest can be repatriated.
This facility may not be there in other accounts for NRIs. The repatriation could
be in foreign currencies.
The deposits under the NRE accounts are not taxable under Wealth Tax. Also, the
interest income is exempt from the income-tax.
While the NRE accounts are accessible only to NRI and PIO there might be some
special cases. NRIs who return to India for permanent settlement may hold the
account till maturity of their deposits.
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Pillar-II
Risk Management and Supervision
Pillar-III
Market Discipline
In order to meet the BASEL-III requirements, Indian banks would have to raise a
lot of external capital. While the norms would strengthen the robustness of banks
against risks, it will also have some effect on the profitability in the short run. The
norms would increase the cost of capital for the banks and have an adverse effect
on the reqturn on equity in the short run.
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Exemption from Central Sales Tax (CST).
Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ
Act).
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Construction of sanitary latrine and smokeless chullah is mandatory
Hiring a contractor is banned
House is allotted in the name of woman or jointly in the name of both man
and woman.
Prefernce is given to
Mentally challenge
Physical challenged
Woman headed houses
Transgenders
Widows and children of members of defence or police forces who died on
duty
Janani Suraksha Yojana
Started - 12 April 2005
Objective - JSY aims at reducing maternal deaths by promoting deliveries in
public and private health institutions
Working - Mother should be at least 19 year old and belong to BPL or SC/ST
category.
Government provides
Rs 500 in case of home delivery
Rs 600 in case of mother from municipal/corporation area delivering baby
in private or public health care center
Rs 700 in case of mother from rural area delivering baby in private or
public health care center
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unskilled labourer to do public works for which he is paid Rs 120 per day. In case
Government is unable to provide employment to labourers then it need pay
labourers for 100 days at their home.
Budget aloocated for MNREGA - Rs 45000 crores ( 2012-2013)
Midday Meal Scheme
Started - Started on different dates in various states in India. It was first
introduced in Uttar Pradesh
Objectives - Providing free lunch on working days to primary and upper primary
students of government schools in India. This scheme aims at promoting
education and removal malnutrition in children.
National Pension Scheme India
Started - 1 January 2004
Objectives - Provides social security to Government employees on retirement
Working - 10% of basic salary is deducted from basic salary and DA and
contributed to pension fund. Central government makes equal contribution to the
fund.
Pradhan Mantri Gram Sadak Yojana
Started - 5 December 2000
Objective - To provide roads in villages with population of 1000+
Rashtriya Krishi Vikas Yojana
Started - August 2007
Objective - This scheme aims at achieving 4% annual growth in agriculture
sector.
Working - Rs 5875 crores will be in agricultural sector in 11th five year plan to
improve agricultural productivity.
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services with a population of 2000 by March 2012
Swarnajayanti Gram Swarozgar Yojana
Started - 1 April 1999
Objective - SGSY provide assistance to rural people living below poverty line to
take up self employment.
Swavalamban
Started - 2010 (Will be closed on 2017-2017)
Goal - To encourage workers working in unorganized sector to save for their
retirement
Working - Workers must invest contribute minimum Rs.1000 to maximum
Rs.12000 per year into their NPS account. Government will contribute Rs 1000
per year to NPS account per year.
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Reverse Repo Rate
Reverse Repo rate is the rate of interest at which the central bank (RBI) borrows
funds from other banks for a short duration. The banks deposit their short term
excess funds with the central bank and earn interest on it.
Reverse Repo Rate is used by the central bank to absorb liquidity from the
economy. When it feels that there is too much money floating in the market, it
increases the reverse repo rate, which means that banks earn higher rate of interest
when they deposit money with the central bank.
Reverse Report rate was an independent rate till 03/05/2011. However, in the
monetary policy announced on 03/05/2011, RBI decided to link it to Repo rate.
So, Reverse Repo Rate is now always 100 bps below the Repo rate (till RBI
decides to delink the same).
CRR (Cash Reserve Ratio)
Have you ever wondered what happens to the amount that you deposit in bank? It
is used by banks to earn money by investing or lending it to others (house loans,
personal loans etc.). But as per the regulations, banks cannot use the entire
amount deposited with them for this purpose. They are required to maintain a
percentage of their deposits as cash. So, if you deposit Rs. 100/- in your bank,
then bank cant use the entire Rs. 100/- for lending or investment purpose. They
have to maintain a portion of the deposit as cash and can use only the remaining
amount for lending/investment. This minimum percentage, which is determined
by the central bank, is known as Cash Reserve Ratio.
So if CRR is 6% then it means for every Rs. 100/- deposited in the bank, it has to
maintain a minimum of Rs. 6/- as cash. However, banks do not keep this cash
with them, but are required to deposit it with the central bank, so that it can help
them with cash at the time of need.
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Interim Budget 2014-15 Highlights
The government's term ends in May and the measure wasnecessary to cover expe
nditure until a national election iscompleted and a new administration installed.
Chidambaram said India's economy, the 11th largest in theworld, had stabilised an
d was showing signs of turnaround. Hisspeech was marred by protests over the pr
oposed division of asouthern state.
GROWTH
* GDP expansion in third and fourth quarters of 2013/14estimated at 5.2 percent.
Growth for the whole year expected at4.9 percent.
FISCAL DEFICIT
* Fiscal deficit seen at 4.6 percent of GDP in 2013/14, belowtarget of 4.8 percent.
* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
* Says need to bring down the deficit to 3 percent of GDP by 2016/17
CURRENT ACCOUNT DEFICIT
* Current account deficit for 2013/14 estimated at $45 billion from last fiscal year'
s $88billion.
* Forex reserves to rise by $15 billion by end of 2013/14
BORROWING/DEBT SERVICING
* Gross market borrowing for 2014/15 seen at 5.97 trillion rupees, net market borr
owing at4.57 trillion rupees.
* Government plans to buy back/switch bonds of 500 billion rupees in 2014/15.
* Ways and Means advances for 2014/15 estimated at 100 billion rupees
* Debt repayment in 2014/15 seen at 1.397 trillion rupees
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* Factory gate tax to be reduced to 10 percent from 12 percent on some capital go
ods,consumer durables
* Cut excise duty on small cars, two wheelers, commercial vehicles to 8 percent fr
om 12percent
* Recommends excise duty reductions on larger vehicles
* Restructure of factory gate tax for mobile handsets
BANKS RESTRUCTURING
* Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15
* Propose to set up public debt management office to start5 work from 2014/15
FINANCE MINISTER COMMENTS
Resurgence in exports, global economic revival and moderation in inflation point
to betteroutlook for Indian economy in 2014/15.
"I can confidently assert that the economy is more stable today than what it was t
wo yearsago. The fiscal deficit is declining, the current account deficit has been c
onstrained, inflationhas moderated, the quarterly growth rate is on the rise, the exc
hange rate is stable, exportshave increased and hundreds of projects have been un
blocked."
India's economy now the 11th largest in the world, he said.
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Bank Slogans
Multinational Bank Slogans
Name of the Bank Punch line
CITI Bank Let's get it done
Standard Chartered Bank Your Right Partner
HSBC Bank The World's Local Bank
Royal Bank of Scotland Make it happen
BNP Paribas The bank for a changing world
JPMorgan Chase Bank The right relationship is everything
Deutsche Bank A passion to perform
Scotia Bank Youre richer than you think
American Express Bank Do more
Barclays Bank Fluent in finance
DBS Bank Living, Breathing Asia
Indian Bank Slogans
Bank Name Bank Slogan
Allahabad Bank A tradition of trust
Andhra Bank Much more to do. With YOU in focus
Bank of Baroda India's International Bank
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State Bank of India The Nation banks on us; Pure Banking Nothing Else; With you all the way
State Bank of Hyderabad You can always bank on us
State Bank of Mysore Working for a better tomorrow
State Bank of Patiala Blending Modernity with Tradition
State Bank of Travancore A Long Tradition of Trust
South Indian Bank Experience Next Generation Banking
Syndicate Bank Your Faithful And Friendly Financial Partner
The Economic Times Knowledge is Power
UCO Bank Honors Your Trust
Union Bank of India Good people to bank with
United Bank of India The Bank that begins with U
Vijaya Bank A Friend You can Bank Upon
Yes Bank Experience our expertise
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New Appointments in India 2014
Mr. Narendra Modi : Chairman, Planning Commission.
Mrs. Sumitra Mahajan : Speaker, Lok Sabha.
Mohammad Hamid Ansari : Chairman, Rajya Sabha.
Mr. P. J. Kurien : Deputy Chairman, Rajya Sabha.
Mr. Arun Jaitley : Leader of House (Rajya Sabha).
Mr. Ghulam Nabi Azad : Leader of Opposition (Rajya Sabha).
Dr. Montek Singh Ahluwalia : Deputy Chairman, Planning Commission.
Mr. V. S. Sampath : Chief Election Commissioner
Mr. Harishankar Brahma : Election Commissioner.
Syed Nasim Zaidi : Election Commissioner.
Mr. Shashi Kant Sharma : Comptroller and Auditor-General of India.
Mr. Justice K. G. Balakrishnan : Chairperson, National Human Right
Commission (NHRC)
Mr. Ajit Kumar Seth : Cabinet Secretary.
Mr. Nripendra Misra : Principal Secretary to Prime Minister.
Justice V. Eshwaraiah : Chairman, National Commission for Backward Classes.
Ms. Shanta Sinha : Chairperson, National Commission for Protection of Child
Rights (NCPCR)
Dr. P. L. Punia : Chairman, National Commission for Scheduled Castes
Dr.Rameshwar Oraon : Chairman, National Commission for Scheduled Tribes
(NCST).
Prof. D. P. Agrawal : Chairman, Union Public Service Commission (UPSC).
Dr. M. S. Swaminathan : Chairman, National Commission on Farmers (NCF).
Mr. Ajit Kumar Doval : National Security Adviser and Special Adviser to PM
(Internal Security).
Mr. Sharad Kumar : Director-General, National Investigation Agency (NIA)
Mr. Arunendra Kumar : Chairman, Railway Board.
Mr. Shumsher K. Sheriff : Secretary-General, Rajya Sabha
Mr. T. K. Viswanathan : Secretary-General, Lok Sabha.
Mr. Syed Asif Ibrahim : Director, Intelligence Bureau (IB).
Mr. Ranjit Sinha : Director, Central Bureau of Investigation (CBI).
Mr. Alok Joshi : Director, Research and Analysis Wing (RAW).
Mr. Jayanto Narayan Choudhury : Director-General, National Security Guard
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Mr. R. S. Sharma : CMD, Oil and Natural Gas Corporation (ONGC).
Mr. B. C. Tripathi : CMD, GAIL.
Mr. S. Behuria : Chairman, IOC.
Mr. Sunil Kumar Srivastava : CMD, Oil India Ltd.
Mr. Vineet Joshi : Chairman, Central Board of Secondary Education (CBSE).
Mr. U. K. Sinha : Chairman, Securities and Exchange Board of India (SEBI).
Dr. Harsh Kumar Bhanwala : Chairman, National Bank for Agriculture and
Rural Development (NABARD).
Smt. Arundhati Bhattacharya : Chairman, SBI.
Mr. M. S. Raghavan : Chairman, IDBI.
Justice Dilip Raosaheb Deshmukh : Chairman, Company Law Board.
Mr. Hardeep Singh Puri : India's Permanent Representative to UN.
Mr. S. K. Roy : Chairman, Life Insurance Corporation of India (LIC)
Mr. Ashwin Pandya : Chairman, Central Water Commission.
Ms. Mamta Sharma : Chairperson, National Commission for Women.
Dr. Y. V. Reddy: Chairman, 14th Finance Commission.
Dr. Pronob Sen : Chairman, National Statistical Commission.
Smt. Leela Samson : Chairperson, Central Board of Film Certification.
Dr. Rakesh Tewari : Director-General, Archaeological Survey of India (ASI).
Mr. Sidharth Birla : President, Federation of Indian Chambers of Commerce
and Industry (FICCI)
Dr. Rahul Khullar : Chairman, Telecom Regulatory Authority of India (TRAI).
Dr. Rajan Katoch : Director, Enforcement Directorate.
Mr. R. V. Verma : Chairman, Pension Fund Regulatory and Development
Authority (PFRDA).
Mr. Pradeep Kumar : Commissioner, Central Vigilance Commissioner (CVC).
Dr. Sekhar Basu : Director, Bhabha Atomic Research Centre.
Mr. N. Ramachandran : President, Indian Olympic Association.
Prof. P. Sinclair : Director, National Council of Educational Research and
Training (NCERT).
Mr. S. Gopalakrishnan : President, Confederation of Indian Industry (CII).
Mr. Sam Pitroda : Chairman, National Knowledge Commission.
Mr. Ratan Tata : Chairman, Investment Commission.
Mr. Shivlal Yadav : Interim President, Board of Control for Cricket in India
(BCCI).
Mr. R. Chandrasekaran : Chairman, NASSCOM.
Mr. Ramesh Sippy : Chairman, National Film Development Corporation
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Important Economic Terms:
1. Commercial Paper: Commercial Paper (CP) is an unsecured money market
instrument issued in the form of a promissory note. Corporates, primary dealers
(PDs) and the AllIndia Financial Institutions (FIs) are eligible to issue CP.
Maturity period: between a minimum of 7 days and a maximum of up to one year
from the date of issue. CP can be issued in denominations of Rs.5 lakh or
multiples thereof. Only a scheduled bank can act as an IPA
(Issuing and Paying Agent) for issuance of CP.
2. Treasury Bills: Treasury bills (Tbills) offer shortterm investment
opportunities, generally up to one year. They are thus useful in managing
shortterm liquidity. At present, the Government of India issues three types of
treasury bills through auctions, namely, 91day, 182day and 364day. There are
no treasury bills issued by State Governments. Treasury bills are available for a
minimum amount of Rs.25,000 and in multiples of Rs. 25,000. Treasury bills are
issued at a discount and are redeemed at par. Treasury bills are also issued under
the Market Stabilization Scheme (MSS).
3. Certificates of Deposit (CD): Certificate of Deposit (CD) is a negotiable
money market instrument and issued in dematerialized form or as a Usance
Promissory Note against funds deposited at a bank or other eligible financial
institution for a specified time period.
Note: CDs can be issued by (i) scheduled commercial banks {excluding Regional
Rural Banks and Local Area Banks}; and (ii) select AllIndia Financial
Institutions (FIs) that have been permitted by RBI Minimum amount of a CD
should be Rs.1 lakh, and in multiples of Rs. 1 lakh thereafter. The maturity period
of CDs issued by banks should not be less than 7 days and not more than one
year, from the date of issue.
4. Fiscal Deficit: A deficit in the government budget of a country and represents
the excess of expenditure over income.
So this is the amount of borrowed funds require by the government to meet its
expenditures completely.
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11. Crossing of Cheque: Crossings refers to drawing two parallel lines across the
face of the cheque.
A crossed cheque cannot be paid in cash across the counter, and is to be paid
through a bank either by transfer, collection or clearing. A general crossing means
that cheque can be paid through any bank and a special crossing means where the
name of the Bank is indicated on the cheque can be paid only through the named
bank.
Dishonour of Cheque: Non payment of cheque by the paying banker with a
return memo giving reasons for the non payment.
12. Demand Draft: Demand draft is defined as an order to pay money drawn by
one office of a bank upon another office of the same bank for a sum of money
payable to order on demand. Cheque and Demand draft both are used for transfer
of money.
Difference b/w Cheque & DD: A cheque can be bounce but D.D cannot be
bounce as it is already paid.
13. Current account: Current account with a bank can be opened generally for
business purpose. There are no restrictions on withdrawals in this type of account.
No interest is paid in this type of account.
14. NEFT (National Electronic Fund Transfer): NEFT enables funds transfer
from one bank to another but works a bit differently than RTGS. NEFT is slower
than RTGS. The transfer is not direct and RBI acts as the service provider to
transfer the money from one account to another. You can transfer any amount
through NEFT, even a rupee.
15. RTGS (Real time gross settlement ): RTGS system is funds transfer systems
where transfer of money or securities
takes place from one bank to another on a "real time" and on "gross" basis.
Settlement in "real time" means payment transaction is not subjected to any
waiting period. The transactions are
settled as soon as they are processed. Minimum & Maximum Limit of RTGS: 2
lakh and no upper limit.
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If deflation in not controlled, govt. makes a fiscal policy. (taxes decreased,
subsidy on loan increased).
25. DISFLATION: When government wants to control the inflation condition,
the suggests RBI to increase the key rates.
If inflation in not controlled, govt. makes a fiscal policy. (taxes increased, subsidy
on loan decreased)
26. Doubtful Asset: An asset would be classified as doubtful if it has remained in
the substandard category for a period
of 12 months.
27. CASA Deposit: Deposit in bank in current and Savings account.
28. Liquid Assets: Liquid assets consists of cash, balances with RBI, balances in
current accounts with banks, money at call and short notice, interbank
placements due within 30 days and securities under held for trading and
available for sale categories excluding securities that do not have ready market.
29. Import parity price (IPP): The price that a purchaser pays or can expect to
pay for imported goods such as petrol, diesel or cooking gas. The import parity
price (IPP) is the price at the border of a good that is imported, which includes
international transport costs and tariffs. The IPP is used in International trade and
is sometimes referred to as the International Benchmark Price.
30. Export parity price (IPP): The price that a producer gets or can expect to get
for its product if exported, equal to
the Freight on Board price minus the costs of getting the product from the farm or
factory to the border. The EPP applies only to the quantity that is exported and not
to the quantity that is sold domestically
31. Participatory Notes or Pnotes: are derivative instruments, used by Foreign
Institutional Investors (FIIs) who are NOT registered with SEBI. PNotes, mostly
used by overseas HNIs (High Networth Individuals), hedge funds and other
foreign institutions, allow them to invest in Indian markets through registered
Foreign Institutional Investors (FIIs), while saving on time and costs associated
with direct registrations.
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Basic Financial Terms A-Z
A
AGM- Annual General Meeting, it is the year meeting held by every registered
company. Agenda is to explain the performance during the year, presentation of
annual financial statements, voting on important financial decisions. Any
shareholder can participate in AGM.
Asset turnover ratio - This ratio can be explained as Net assets / Total turnover
or sales. This ratio measures the operational efficiency of business assets. In
simple terms this measures how many time total assets turned in a year and how
efficiently the assets are used in a business.
Acid test ratio - This is one of the important ratio to measure business liquidity.
Business liquidity is defined as ability of a business to pay it;s short term debts.
Acid test ratio = Highly liquid assets / current liabilities
American Depository Receipts - This is the way non-US companies raises
money from US investors. These shares can be traded in US stock exchanges and
denominated in US $.
Amortization - It is an accounting technique by which intangible assets are
written off over a period of time. For example provision for doubtful debts or
preliminary expenses are written off over a certain period of time.
Annuity - It is an investment scheme under which investor makes recurring
investments and lump sum payment is made to him at the end. Common example
is Recurring deposit account at a post office where people makes small monthly
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Current asset - An asset that can be converted into cash with 12 months. For
example - debtors, stock etc.
Credit rating - A ranking applied to an individual, business or a nation based
upon its credit history and current financial position. There are various credit
rating companies in India such as Crisil.
CPI - Consumer price index is measure to find price of a bundle of commodities.
CPI is used to measure the inflation in a country.
D
Debt consolidation - Debt consolidation is a process by which various loans and
converted into a single loan to reduce interest rate and instalment value.
Depreciation - Depreciation is reduction in value of an asset due wear and tear
over a period of time. For example a company purchased a machine in 2005 and
planned to charge 20% depreciation. In 2010 the machine will be written off from
the books of account.
Dividend - Dividend is the amount per share paid by a company to its
shareholders. Dividend value is based upon company's profitability.
Dividend payout ratio - It is the ratio of dividend paid per share and EPS (
Earning per share )
Double entry bookkeeping - It is a method of bookkeeping in which every
transaction is recorded two accounts. Once in debit side and once in credit side.
E
Earning per share - Earnings made by a company in a financial year divided by
number of issued shares.
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Gearing - It is the ratio of debt to equity
Goodwill - Intangible assets that defines firm's reputation in monetary terms.
Gross profit = Net sales - Net purchases - Direct expenses
GDP - Gross domestic product is the aggregate value of goods and services
produced by every person of a nation.
GST - Goods and services tax is the same tax system for everything. It is
proposed that GST will replace the multi tax system in India by 2015.
H
Hedging - Hedging is a technique used by investors to protect themselves from
adverse price movements. Derivatives are used for hedging in which hedgers
takes the risk of price fluctuations.
Hedge funds - Mutual funds which invests in derivatives
I
Index - It is statistical measure used to find price variations in market. In stock
markets most dominating stocks are grouped to make an index. For example -
Sensex.
Income statement
A statement that represents both income and expenditure of a business during a
specific period of time.
IPO - Initial public offer is issue of stocks for the first time in the market.
Intangible assets Assets which cant be seen but have value for business. For
example Goodwill.
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Limited liability Liability of an individual or a business up to the value of
investment made in a business
M
Monopoly - A situation in market where there are many buyers but a single seller
exist.
Money market - Market dealing in short term lending and borrowing of funds.
Also know as Cash market.
Monetary policy - Set of actions by Central bank of a country ( RBI in case of
India) to control the supply of money. These actions included increase in interest
rate, open market purchases, changing commercial bank's reserve funds ratio
(SLR) etc.
Marginal cost - Additional cost to produce an extra unit of product.
Margin - Amount of profit added to cost price of each unit of a product
Margin call - Margin call term is used in two situations. First - Whenever a
lender gives a secured loan and loan value is a fixed percentage of loan then
whenever the value of security decrease below the decided ratio then lender given
a margin call to borrower to bring loan to security ratio to decided
level. Secondly in stock exchanges traders trades in various securities by paying
20-30% of the value of securities. Whenever the value of security goes below that
margin, broker gives margin call to trader to bring the margin to desired level.
Mark-to-market - As explained above while defining margin call, value of
assets in case of securities is measured on daily basis. If the trader's asset value
increased, increased value is transferred to his account. In case the value of assets
decreased margin call is made to adjust the margin.
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Preference shares - A type of shares having no voting rights and have higher rate
of dividend.
Ponzi schemes - It is a kind of fraud scheme which use Network marketing as a
tool. Investors are paid out of new investments. These schemes end when new
investments stop coming and large number of investors wants to withdraw their
money. Latest Ponzi scheme in India was "Speak Asia".
PLR - Prime lending rate is the minimum rate of interest that is to be charged by
a bank. Each bank decides its own PLR.
R
ROI - Rate on investment is return divided by value of investment
Redemption - Maturity date of a security or a bond
Recession - An economic situation of negative growth
Repo rate - Rate at which Central bank (RBI in case of India) lends money to
commercial banks
Reverse repo rate - Rate at which commercial banks lends to central bank
Right issue - Issue of shares in which existing shareholders gets right to buy
shares in proportion of their existing holding
Risk free return - Rate of return, normally it is 90 days bills issued by a national
government
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List of Basic Accounting Terms
A
Accounting - process of recording, analysis and reporting monetary transactions
Accounting Concepts - Basic principles upon which accounting is based
Accounts payable - Amount payable by business entity to various parties from
whom good or services have been purchased.
Account receivable - Amount due to business entity to whom goods or services
have been sol
Accrual basis - An accounting system which explains that expenses and incomes
should be recognized at the time when they are actually realized.
Amortization - It is the splitting off a loan or intangible assets over a future
period
Annual report - Report issued by a company at the end of year containing all
important financial statements and preview of management's goals.
Authorized share capital - Maximum share capital a company is authorized to
issue
B
Bad debts - Noncollectable receivables
Balance sheet - Statement that summarizes assets and liabilities of a business
entity
Bankruptcy - A state in which an individual or legal entity is unable to pay off
his debts so he surrenders his assets to the court.
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and used to balance an account.
Carried forward : Written as c/f. Term used to transfer the balance from one
period to the another.
Carriage inwards : These are the expenses incurred for transporting the goods
purchased by the firm.
Carriage outwards : Expenses incurred for transporting goods sold by the firm.
Cash : It broadly covers currency and generally accepted equivalents of cash, like
cheques, drafts and demand deposits in bank.
Cash at bank : Deposit with bank.
Cash Book : A book of all transactions or entries for cash payments and receipts.
Cash on hand : Cash available and undeposited.
Closing stock/ Closing inventory : Goods remaining at the end of an accounting
period.
Conservatism principle : Accounting concept that states that all expected losses
should be recorded but not expected gains.
D
Depreciation : Decrease in value of assets or the cost of an asset is allocated to
that period during which asset is used.
Discount : A deduction from cost of something , offered by seller.
Dividend: A share of profit which is to be distributed to the shareholders.
Dividend Yield: Ratio of current dividend to the current market price of a share.
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Financial Ratio : Ratio based on firm's financial statement which reflects firm's
financial condition and performance.
Financial Statement : A formal record of the financial activities of a business,
person or other entity.
Financial data is presented in a structured manner.
Fixed Assets : It includes premises, plant and machinery, furniture, land and
buildings etc.
Fixed Charge : A required payment under a contract.
Freehold Premises : Premises which are not subject to any charge.
Funds Flow Statement : A statement which shows inflow and outflow of funds.
G
Gross Profit Margin : Ratio of Gross profit to net sales i.e. gross profit as a
percentage of net sales.
H
Holding Company : A parent company which holds enough stock in another
company to hold its board of directors.
Human Resource Accounting (HRA) : Measuring the cost and value of
employees and managers in the organisation. It includes the measurement of the
cost incurred to recruit, hire, train and develop employees and managers.
HRA Report : After measuring the cost and value of its people, the organisation
prepares a report which is known as HRA Report.
I
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M
Marketable securities : Securities which can easily be converted into cash.
Market value : Mutually accepted price of an asset between buyers and sellers. It
is price at which an asset would trade in market.
Matching Principle : States that expenses should be recorded during that period
when it is incurred, regardless the period of transfer of cash.
Miscellaneous expenditure : Lower monetary value costs are misc expenditure
like various meals, ticket prices etc.
Mortgage : A temporary pledge of property to the creditor as a security for an
obligation or the debt repayment.
N
Net block : Net block is what asset are worth to the company. Generally, it is
gross block less accumulated depreciation.
Net current assets : Current assets less current liabilities.
Net income : Total earnings of company. It represents firm's total profit or loss,
calculated by taking all revenues and deducting all the costs of the business.
Net profit margin : Net profit or income as a percent of sales i.e. net Income/
Sales.
O
Operating profit margin : Operating income / Revenue.
Outstanding expenses : Unpaid expenses.
Overdraft : When money is withdrawn from bank account and account balance is
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Retained earnings : A portion of net income of company which is not distributed
in shareholders and reinvested in core business.
Return on equity : Equity earnings / Net worth.
S
Sales book : A complete record of sales which are made on credit.
Sales Returns Book : A record of entries of those goods which are returned by
customers and earlier sold on credit.
Secured loans : Loan backed by an asset belongs to the borrower, just to reduce
the risk for the lender.
Sinking fund : Fund created by keeping aside some money annually for gradual
repayment of debt.
Sundry expenses : Miscellaneous expenses.
T
Total asset turnover ratio : Net sales/ Total assets.