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
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