Definition of Journal entries

Journal is a day books in which bookkeeper records all the transaction first time . Transaction must be record in this book date wise and journal applies the rules of double entry system .
Suppose Ram takes loan of Rs.100000 from his friend. Then what come in is cash and so cash account will be debited and His friend is giver of loan, so his friend’s loan account will be credited in journal
Journal entry will be passed in the journal of Ram
Cash Account Dr. 100000 /
To Friend’s loan Account / 100000
In other words journal is the book of primary entry . Whenever any transaction or event occurs it is recorded in the first instance in the journal . There are various types of journal.

1.Purchase day book → to record transactions relating to credit purchases.
2.Sales day book → to record transactions relating to credit sales.
3.Purchase return book → to record transactions relating to purchase returns.
4.Cash book → to record cash , bank and discount transactions .
5.Journal Proper → to record other transactions for which no specific journal is maintained .
All transaction are first recorded in the journal as and when they occur , the record is chronological , as otherwise it would be difficult to maintain the record in an orderly manner. The form of journal is given below :
Journal
_________________________________________________________________________
Date ↓ particular ↓ L.F. ↓ Dr. Amount ↓ Cr. Amount ↓
________________________________________________________________________

The columns have been numbered only to make clear the following explanations but otherwise they are not numbered . The following point should be noted :
(i) In the first column the date of the transaction is entered , the year is written at the top , then month and in the narrow part of the column the particular is entered .
(ii) In the second column , the names of the accounts involved are written , first the account to be debited , with the word Dr. written towards the end of the column. In the next line , after leaving little space , the name of the account to be credited is written preceded by the word To ( the modern practice shows inclination towards omitting Dr and To . Then in the next line the explanation for the entry together with necessary details is given , this is called narration .
(iii) In the third column the number of the page in the ledger on which the account is written up is entered
(iv) In the fourth column , the amounts to be debited to the various accounts concerned is entered .
(v) In fifth column , the amount to be credited to the various account is entered .
Before one can journalise transactions , one must think on the basis of the rules given above , the effect of the transactions on assets , liabilities , expenses , gains etc. of the firm . In accordance with the effect , the accounts to be debited or credited will be determined . Then the entry will be made in the journal as indicated above

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What is Working Capital Turnover Ratio

There is direct relation of working capital of company with its sales. We have more control over working capital because we can change current asset or current liability according to our need. But, there is no full control over our sales because external business environment affects our level of sales. Working capital turnover ratio is good tool to take decision to manage sales. It shows the use of working capital for sales. Both high and low working capital turnover ratio is not good. Because low WCTR means low inefficient use of working capital in operation and very high working capital turnover ratio does not show good position of company because its shows company is operating with high short-term debt obligations. Only optimum working capital turnover ratio is the best. Formula of Working capital turnover ratio.

= Cost of sale or sales / average working capital

This ratio also shows the return in volume on our net invested current assets. We can also compare it with Asset turnover ratio which shows the relationship of sales and total assets

= Cost of Sales or Sales / Total Assets

If we write earning asset instead of writing cost of sales or sales, it will be the Earning assets to total assets ratio. It is also better way to check the position of company

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Making of Bank reconciliation statement

Bank reconciliation statement tells the reason why your cash books bank column is not matching with your bank pass book .For making bank reconciliation statement , if you have deemed balance of cash book as base the see bank account and if the bank accountant has not passed any voucher entry then all entries must have to be according to our bank pass book for this I am doing some practical example solve
+ -
Bank as per cash book xxxxx -
1st Event

Add cheque issue but not yet
Presented
( It means bank Accountant
Has not passed entry of payment xxxx -
2nd Event
Less Cheque deposit but not cleared
By bank ( It means our balance is
Not increased in bank account , so
We should also see it and less from
Our cash book balance ) xxxx
3rd Event
Less Bank charges debited by bank but
Not recorded in cash book
( It means bank decreased our balance
For their expense so we should also less
These bank charges ) xxxx
4th Event
Add
Dividend collected by bank credited in pass
Book ( It means bank increased our balance
But we have no contact , so when we get this
Information from our pass book, we should
Add in our cash book balance) xxxx
5th Event
Less
Insurance premium paid by bank
( Because , we have given the order to bank
That he can pay directly , so bank paid and
Our balance is decreased , so we should
Also less our balance) xxxx
6th Event
Less
Customer 's cheque dishonoured by bank not recorded
in cash book xxxx
7th Event
Add
Wrong Credit Given by bank
It means bank has increased our bank balance
so for matching our cash book we must add this amount
in our cash book bank column xxxx

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Relationship Between Accounting And IT

Accounting and Information technology are two terms which are the used in every business . Because both are needed for effective working of a corporate or company. It is the need of time that we should understand the relationship between Accounting and Information Technology . Accounting is related recording and utilisation of recorded data . Information technology is scientific , technological , engineering disciplines and management technique used in information handling and processing , their application , computers and their interaction with men and machines and associated , economical and cultural matters . In Simple wording IT is that technique which and get and utilize the information with effective and efficient way.
Now , we are ready for giving the relationship between Accounting And Information technology.
☼ Both are related to get information and utilization of that information . So both are interconnected with each other . If our specialize of both area merge both system with scientific and technical way , then they easily overcome the different problems due to lack of correct and adequate information related to business.
☼ Because of Our Educationist now aware that it is very long run benefit , if we try to relate each other in the education system . So they include MSC-IT syllabus the fundamental of accounting and in the syllabus OF MBA- Finance , they have include the fundamental of Information technology. This is the clear sign of the good relationship between Accounting and Information technology.

In last if we want to get the benefit from their relationship , IT should discover such techniques and software which is very easy to learn and use for our young accountants Our Accounting should make flexible principals and standards so that our young IT- technician can easily adopt them for their language of computer

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What is accountancy

Accountancy is the practical form of accounting. In many countries, all accounting courses are done by using word accountancy courses. I think, accountancy is fully academic term of accounting.
Accountancy is related to making of final accounts and preparing of financial reports which are useful for business, debtors, creditors, tax authorities and employees. In the British, Professional accountants have made the Consultative Committee of Accountancy Bodies. CCAB is now a limited company with six members:
The Institute of Chartered Accountants in England and Wales (ICAEW)
The Institute of Chartered Accountants of Scotland (ICAS)
The Institute of Chartered Accountants in Ireland (ICAI)
The Association of Chartered Certified Accountants (ACCA)
The Chartered Institute of Management Accountants (CIMA)
The Chartered Institute of Public Finance and Accountancy (CIPFA)
But, In India, accountancy is just basic introduction of accounting at secondary level and full course completed in graduate with learning of different subjects like financial, cost, management and corporate accounting.


In last we can say both accountancy and accounting is branch of science and professional accountants use this science for recording, classify, analysis and summarizing of transactions of business and main aim is to provide useful information to interested parties regarding their business.

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Difference between depreciation and fluctuation and obsolescence

If, this question is asked from a person who is not related with accounting field , will not able to differ among them. But as an accountant, you should know what is meaning of above term and where can use in accounting.

Depreciation

It is a gradual deterioration or decrease in the value of asset after using that asset in our day to day work or after spending of time. In this world, everything is perishable, so making true profit and calculates true value of any asset at present time, it is very necessary to depreciate on fixed asset and deduct from it.

Fluctuation

If you are doing business or linked with any business, you know that prices are always up and down due to changing in the condition of business environment. Fast changing in market prices is called fluctuation. It is not called depreciation because, it is not related to use of fixed asset. Fluctuation can also increase the price of fixed asset but after deducting depreciation, value of fixed assets will be decreased. Fluctuation is fully ignored and there is no accounting treatment. But we show depreciation as a loss of business.

Obsolescence

When new fixed assets’ quality, efficiency and capacity decrease the value and usability of old fixed assets, then it is called obsolescence of old fixed assets.
The main example, we can look in different machines or technical equipment especially in medical field. Every new equipment decreases the value of previous equipment. Because of it is not related to the nature and use of fixed asset, so it is also not depreciation. Obsolescence is not important in field of accounting but it is important in technology research and marketing of product

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What is the differance between group and ledger

Basically group and ledger are both helpful to make simple category of our assets , liabilities , income and expenditures into current and fixed asset , direct and indirect expenses and loss and income . But there are many difference you can find if you use tally 9 for your practical purpose .


Before we know these difference we should understand its aim first




Aim of Understanding of this question




•After understanding of this question , you will proper classify your all transactions
•After understanding of this question , you will show correct profit or loss in profit and loss account and financial position in balance sheet .

Main Differences between Group and ledger in tally 9




1.Tally provides us 23 automatic groups for ledger creation . But tally provides only 2 ledger account in tally software and its names are cash are profit and loss account .


2.Group is head category or it is base of ledger creation . We can simply take an example from you day to day field . Suppose you have taken commerce subject and it can also divide into management theory , accounts , business maths and economics . So , Main group is commerce and and all other are called ledger accounts but under this commerce group . Same will apply in accounting in tally , We can create several groups under single ledger .


3.We generally neither create extra groups nor change them which is provided by tally software but we must create different ledger according to the need of recording of different vouchers in tally 9


4.If we have changed group from one category to another , all ledger will automatically change by this . So be serious for making any change in group .


5.Group is most helpful to make final account according the the nature of organisation , but ledger creation is not helpful for any redesigning of final account in tally 9. Let me explain more about it . In the previous article , I need insurance company account not in sundry debtor account but in sundry insurance account so , I made sundry insurance account in group for making redesigning my final account .

"In last I will suggest you that both have their own qualities in tally 9 and you will decide which group or ledger you need or not . Tally provides you alter button for any change . For changing , you should click this and you can made all changes after accept changes

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Difference between accounting and book keeping

1. Book keeping is just record of transaction, but accounting is huge science of recording, classification, analyze and summarizing of business transaction and interpretation of different result.

2. A book keeper always works under head accountant and book keeper is often said account assistant.

3. Calculation of tax and filling of tax return is the part of duties of accountant. But, he can take help from book keeper for tracking the total of the incomes of business.

4. Book keeping is just like machine work in which book keeper passes the vouchers into books but accounting work is fully professional and need high experience for analysis and interpretation of financial statements.

5. Most difficult part of book keeping work is to reconciliation of bank account with pass book, cash balance with physical cash in hand, stock in books with physical stock in Godown. Most difficult work of accountant is to make final account and analysis of financial statements.

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Benefits of Accounting Education in Accounts

1st Benefit
The most important benefit of accounting education is that you will become well educated in the field of accounting. With this you can solve any accounting problem. It is reality that 90% successful businessmen have accounts background. So becoming perfect businessman it is very necessary to learn accounting education.
2nd Benefit
If you have prefect in accounting, you can use your money with effective way. Because you know that what accounts tells you about the current position of your business and how can you change this position with other solution tools of accounting. If you are in the home at accounting, then you will know the inflow and outflow of money and after this you can create the way of changing inflow into outflow and outflow into inflow. This does not mean cheating but it means ability to change fund according to time and place.
3rd Benefit
Accounting Education increases your practical and business maths. Because calculating of profit margin , calculation of cost of goods sold , calculation of balance of different accounts , calculation of different ratios surely increase the calculation ability of any general person.
4th Benefit


Accounting Education gives you the power of estimation about company is under how long in the water of his financial and revenue position. Just apply simple formula you can estimate the financial position of company. That is asset – liabilities = capital if you know and use of this simple formula you can compare two companies. Now you can understand yourself, if you will learn all the matters of accounting, you can easily calculate the length and breathe of financial position of company, after this you can suggest how to make effective structure of company which faces any economy problem.
5th Benefit
It is general saying that a good accountant is always a good manager. He can make good plans for company. Because, pulse rate of company’s financial work is in his hand. All cash inflow and outflow is recorded by him. So if you learn accounting education, you can easily manage your business

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What are the types of Accounts

If you ask one question from me what the total area of accounting is, then my answer is that accounting area is so wide. We can not make boundary on the four sides of accounting because this is developing science we can not bound it in few limits. It is 100% true that area of accounting is increasing day by day. Few day earlier, When I alert me the information for my GMail account with the help of Google alert . I had written Accounting, I felt happy when I found so many email from Google alert about accounting information is daily publishing in 10 millions blogs and websites. It means day by day accounting area is spreading. This is very good news for all who want to make career in the field of accounting. But today I am telling you the starting pin points of accounting, there is no end point and never will become any end point of accounting.

○ Financial Accounting

Financial accounting is relating to record all financial activity. These activities are related to business. Because of area of business is increasing day by day so the area of financial accounting is also increasing. Every day a new type of business is started. So daily accountant invents a new journal entry. Accountant will take the help of financial accounting with new thinking of result. So a new chapter of financial accounting is included by us.
○ Cost Accounting

If you want to increase your profit, then start to decrease your cost. What a dialogue, this is not a dialogue but this is the reality of today business. Every day an accountant invents new method of decreasing the cost. All method of calculation of FIFO , LIFO , standard costing , variance calculation and making of cost budget is not the end of cost accounting but this is the starting of cost accounting . Internet cost reduction method is also a new mile stone in this direction.

○ Management Accounting

One new manager will do work in the field of management accounting. He will utilize accounting information in new way . This is the real definition of management accounting. How to use accounting data and accounting education in the field of management so that we will carry our business at international level. Ratio analysis , fund flow statements, cash flow statements , working capital management , capital budgeting , cost of capital calculation is just starting in this point .

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Accounting terminology in accounts

Definition of Accounting Terminology

Accounting Terminology are such accounting words which are most suitable for describing its category. For example 'book of accounts' is general word and Ledger is proper accounting word for more suitable , so these accounting words are known as accounting terminology . "

It is very necessary for that person who is related to other field like technology or medicine . Suppose if a doctor or engineer want to know the term profitability ratio or know what is financial analysis . If you told them with explaining accounting terminology , he never understand . But if you will tell him basic accounting terms with explanation like what is asset and what is liabilities or what is capital , he easily understand if you give some guidance . Here I am giving some basic accounting terminology for this benefit.



1.Cash = Cash is that liquid part of money with this we can buy material goods .
2.Money = Money may be in cash , bank cheque or any bill of exchange
3.Material = Material means the goods which we use for production
4.Finished product = Finished product means goods which is produced after machining process.
5.Debit = It means , we write any amount on which have our some right → suppose , Ram account is debit , it means ram gets some money or goods from us , so we have some right on ram means either we can get our money or price of goods . So accounts always given the name debit . In case of asset like furniture account debit means , we are the owner or purchases it from any other person. In case expenses , any expenses are debit because we take some service so we pay .
6.Credit = Credit means reduce some amount if we have to given to other . → Suppose Bank has to given sham 5000 . This is the liability of Bank when bank paid to customer . Bank will credit the account of customer .
7.Entry = accounting of any transaction with systematical way is called entry
8.Owner's equity = Owner's equity means the claim of owner on the assets of business.
9.Creditor's equity = Creditor's equity means the claim of creditor on the assets of business.
10.Memorandum Account = This is the account which uses just as memory record but not formal account .
11.brought down ( b/d) = It means transfer from previous balance to new page or next day or next month .
12.carried forward = It means transfer of balance to new page or next day starting point of account or next month's starting point of account's balance .
13.Ledger folio= It is the specific number of each account in ledger , the book of accounts .
14.Contra = It is also show in the cash book in the form of C . When cash withdraw from bank or deposit to bank , it is known as contra , after this no need to show in ledger accounts because all dual process of accounting is completed in cash book .
15.goodwill= It means all profits which can count in money which comes from the reputation , quality products or name of company

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Accounting Concepts and its Main importance

Definition of Accounting Concepts

Accounting concepts means flow of thoughts of all wise accounting professionals of this world . It can also be interpreted as "process of understanding of accounting to make sense of universal acceptability. "
In other words accounting concepts some normal rules which can be changed but which has come in to existence with so many hard work of accountants in past. These are basics thoughts of an accountant.

Types of Accounting Concepts

To know more about Accounting Concepts are very necessary to learn because without this you can not understand the fundamentals of accounting. There are many concepts which an accountant uses in their accounting working.

1st concept – Separate entity concept

Under this concept the entity of business man is separate from its business. The main reason is that owner is just giver of capital but if he withdraws without any restriction or any control. Business can dissolve within two days. So every transaction related to withdrawing money from business must be recorded by accountant. So this concept gives us basic knowledge while we are recording transactions in our books that we must know that concern has its own entity and our duty is to record every transaction even it is related to owner or not . Businessman's capital is also the liability of business and if he withdraw for personal use , it is known as drawing and it is deducted from his capital . So under this concept , accountant records every cash , goods and usage of fixed assets for personal use of businessman and while he makes balance sheet all these expenses are deducted from businessman's capital .

2nd Concept – Cost Concept

Under this concept we record all assets on their cost not in market value. This concept is very useful for stable recording of accounting .Because if all transaction recording will start on their market value then it create tension to accountant. Because nobody can say what will the price of your fixed asset in next day. So record all assets on their original cost. But time to time depreciation is deducted from this . But we never record all assets on their market price .

3rd Concept – Matching Concept

When I was doing graduate from my college, my respected teacher taught me that matching concept is very important for an accountant. It means we will compare all expenses with the incomes of business. After matching or compare, it will provide you the real result of performance of business. We can say it profit or loss . So If today you want to know profit or loss of your business, let us start match of your business incomes with your business expenses.

4th Concept – Conservatism Concept

This concept is made when accountant thought that it is very important to secure our business. The risk of business is called losses. So it is the basic duty of accountant to secure his business from different losses. For securing Loss he can make different provisions like provision for doubtful debts, provision for depreciation reserve for contingent liabilities.

Now you are in position to understand different types of concepts for accounting profession. You are also an accountant , you can also make your accounting concepts. I hope, you will make certain new accounting concepts which will very useful for accounting and accounting profession.

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Accounting Education

Accounting Education's future is very bright . If you will become expert in this sector of education , then you can get good earning with respect and honour . What does a person want any more except this . He wants money with honour. Both two things , you can get from accounting Education . But becoming expert in accounting education is not so easy. Just learning of some of the principals of accounting , you can not become expert in accounting education .


Today the age of geographical and international business we should need to study contineusly the new concept of accounting education due to changing situation of different new business . Accounting is practical science , it demands your acceptance and your own work in this practical field of education . Some of great Accounting expert are researching the new techniques of accounting . In this technique not only you will able to record but the technique


> Automatically correct or rectify your accounting mistakes and errors


> Automatically get the interpretation or comment on your accounting work even passing a single entry . What will effect on financial position and what will effect


on profitability of business.


So , All the expert of accounting field should make the future of accounting education more attractive and efficient for new comers of this field

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Accounting Education

Accounting education is an essential part of our education because without such education , we can not calculate our income , our saving and our financial strength . In general , every person of this world need accounting education for maintaining their personal record . This is also called personal book keeping . But when we study the theoretical concept of accounting education , we find different definitions and rules and regulation for proper accounting .
Now let us start What is Accounting Education ?

Accounting Education is combination of two words .

Accounting education = Accounting + Education


Accounting


Accounting is not counting but it is science which is helpful for hunting for the results of business. Accounting is recording , analysis and finalisation of large scale business transactions. Accounting introduces all tools and techniques to solve many or almost every problem of businessmen, factories, Corporations and firms relating to maintaining accounts and different financial reports .

Education

Education is way to get knowledge with scientific method .According to Swami Vivekananda the great philosopher said that it makes us self-confident .It is just use of person’s internal powers . After getting education, person gets moral and professional qualities. After getting education any body can do any professional work. All other persons respect because he is well educated.

Accounting Education

Mixer of both words makes accounting education. Accounting education may be defined as that part of education which provide us the knowledge about accounting terms , journal , ledger , final accounts , analysis and interpretation the result of business . Moreover , this education provide all knowledge of cost calculation and control and it gives different tools for analysis the financial statement . It is very helpful for making business planning . In single line , I say , Accounting is brain of Business , with it business becomes mad and there is no chance to develop it . If you are perfect in this field of education you can easily maintain not only your head office accounts but all the accounts of your all branches. You can maintain the accounts not only your business but you will understand every business like agricultural, industrial and any other service sectoral accounts .Here I want to explain service sector, service sector is a sector where services are being provided by service providers. So professional accountant can easily understand the terms subscription, fees, donation, fund, provident fund, allowance, and gratuity.

Objective of Accounting Education

Almighty has sent us on the earth. What is the objective of sending us on earth? If you do not know then you can not say that there is no any objective of sending us on the earth .Because your thinking of your brain is very limited but God is supreme power who knows the aim of your sending on earth. He wants that you will do any work and make whole world beautiful and wonderful. Like this there are so many objectives of accounting education.

•Accounting education helps you proper utilization of your money and capital.
•It will tell you that you are getting high rate of investment or not.
•What is your earning per share .
•It will help you to making planning, policies. Proper accounting education if you will get from our accounting expert , you will become not only accounts manager but also professional Scholar in the field of accounting education. Because today, different concepts, principals of different area are changing. In this changing environment, accountant will have to adjust.
•If you will not get these new and technical knowledge in the field of accounting, then you will fail in the field of accounting .These days duty of accountant is not limited up to voucher entries in computer. But they have to decide proper utilization of the capital and saving non useful expenditures.

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What is Marginal Costing

Sales – VaribleCost=FixedCost ± Profit/Loss
Contribution= Sales –VaribleCost
Contribution= FixedCost ± Profit/Loss
P / V Ratio= (Contribution / Sales)*100
Per 1 unit information is given,
P / V Ratio = (Contribution per Unit / Sales per Unit)*100
Two years information is given,
P / V Ratio= (Change in Profit / Change in Sales) * 100
Through Sales, P / V Ratio
Contribution =Sales * P / v Ratio
Through P / V Ratio, Contribution
Sales = Contribution / P / VRatio

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What is Operating Cycle

The operating cycle of a firm begins with the acquisition of raw material and ends with the collection of receivables

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What is Funds Flow Statement

Fund means the net working capital. Funds flow statement is a statement which lists first all the sources of funds and then all the applications of funds that have taken place in a business enterprise during the particular period of time for which the statement has been prepared. The statement finally shows the net increase or net decrease in the working capital that has taken place over the period of time.
Float: The difference between the available balance and the ledger balance is referred to as the float.
Collection Float: The amount of cheque deposited by the firm in the bank but not cleared.
Payment Float: The amount of cheques issued by the firm but not paid for by the bank.

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What is Cash Flow Statement

It is a statement which shows inflows (receipts) and outflows (payments) of cash and its equivalents in an enterprise during a specified period of time. According to the revised accounting standard 3, an enterprise prepares a cash flow statement and should present it for each period for which financial statements are presented.

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What is Earning per share

Earning per share (EPS): It is a financial ratio that gives the information regarding earing available to each equity share. It is very important financial ratio for assessing the state of market price of share. The EPS statement is applicable to the enterprise whose equity shares are listed in stock exchange.

Types of EPS:

1. Basic EPS ( with normal shares)
2. Diluted EPS (with normal shares and convertible shares)

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What is Index Funds

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc these schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as "tracking error" in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.
There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

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What is Gilt Fund

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes

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What is Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

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what is Balanced Fund

The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.

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What is Income Debt Oriented Scheme

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

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What is Growth Equity Oriented Scheme

The aim of growth funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

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Close-ended Fund

Close-ended Fund/ Scheme
A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

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Open-ended Fund

An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity

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WHAT IS FOREX

The Foreign Exchange Market is the place where currencies are traded. The overall FOREX markets is the largest, most liquid market in the world with an average traded value that exceeds $ 1.9 trillion per day and includes all of the currencies in the world.It is open 24 hours a day, five days a week.

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Bull and Bear Market

Bull market is where the prices go up and Bear market where the prices come down.

Exchange Rate: It is a rate at which the currencies are bought and sold.

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Dematerialisation:

It is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investor’s account with his depository participant.

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IPO

: First time when a company announces its shares to the public is called as an IPO. (Intial Public Offer)
A Further public offering (FPO): It is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document. An offer for sale in such scenario is allowed only if it is made to satisfy listing or continuous listing obligations.
Rights Issue (RI): It is when a listed company which proposes to issue fresh securities to its shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue.
Preferential Issue: It is an issue of shares or of convertible securities by listed companies to a select group of persons under sec.81 of the Indian companies act, 1956 which is neither a rights issue nor a public issue.This is a faster way for a company to raise equity capital.


Index: An index shows how specified portfolios of share prices are moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upward or downwards.

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Holding Company

A holding company is one which controls one or more companies either by holding shares in that company or companies are having power to appoint the directors of those company
The company controlled by holding company is known as the Subsidary Company.
Consolidated Balance Sheet: It is the b/s of the holding company and its subsidiary company taken together.

Partnership act 1932: Partnership means an association between two or more persons who agree to carry the business and to share profits and losses arising from it. 20 members in ordinary trade and 10 in banking business

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Large Cap / Big Cap

: Companies having a large market capitalization
For example, In US companies with market capitalization between $10 billion and $20 billion, and in the Indian context companies market capitalization of above Rs. 1000 crore are considered large caps.

Mid Cap: Companies having a mid sized market capitalization, for example, In US companies with market capitalization between $2 billion and $10 billion, and in the Indian context companies market capitalization between Rs. 500 crore to Rs. 1000 crore are considered mid caps.

Small Cap: Refers to stocks with a relatively small market capitalization, i.e. lessthan $2 billion in US or lessthan Rs.500 crore in India.

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Debentures

Companies raise substantial amount of longterm funds through the issue of debentures. The amount to be raised by way of loan from the public is divided into small units called debentures. Debenture may be defined as written instrument acknowledging a debt issued under the seal of company containing provisions regarding the payment of interest, repayment of principal sum, and charge on the assets of the company etc…

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Penny Stock

Penny stocks are any stock that trades at very low prices, but subject to extremely high risk

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Bluechip Stock

Stock of a recognized, well established and financially sound company.

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Cut off Price

: In Book building issue, the issuer is required to indicate either the price band or a floor price in the red herring prospectus. The actual discovered issue price can be any price in the price band or any price above the floor price. This issue price is called “Cut off price”. This is decided by the issuer and LM after considering the book and investors’ appetite for the stock. SEBI (DIP) guidelines permit only retail individual investors to have an option of applying at cut off price

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Book Building Process

It is basically a process used in IPOs for efficient price discovery. It is a mechanism where, during the period for which the IPO is open, bids are collected from investors at various prices, which are above or equal to the floor price. The offer price is determined after the bid closing date.

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Market Capitalisation

The market value of a quoted company, which is caliculated by multiplying its current share price (market price) by the number of shares in issue, is called as market capitalization

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Portfolio

A portfolio is a combination of investment assets mixed and matched for the purpose of investor’s goal

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SEBI and its role

The SEBI is the regulatory authority established under Section 3 of SEBI Act 1992 to protect the interests of the investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith and incidental thereto

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Financial markets

The financial markets can broadly be divided into money and capital market.
 Money Market: Money market is a market for debt securities that pay off in the short term usually less than one year, for example the market for 90-days treasury bills. This market encompasses the trading and issuance of short term non equity debt instruments including treasury bills, commercial papers, banker’s acceptance, certificates of deposits, etc.

 Capital Market: Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges. Capital market can be further divided into primary and secondary markets.

Primary Market: It provides the channel for sale of new securities. Primary Market provides opportunity to issuers of securities; Government as well as corporate, to raise resources to meet their requirements of investment and/or discharge some obligation.
They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc. They may issue the securities in domestic market and/or international market.
Secondary Market: It refers to a market where securities are traded after being initially offered to the public in the primary market and/or listed on the stock exchange. Majority of the trading is done in the secondary market. It comprises of equity markets and the debt markets.

Difference between the primary market and the secondary market: In the primary market, securities are offered to public for subscription for the purpose of raising capital or fund. Secondary market is an equity trading avenue in which already existing/pre- issued securities are traded amongst investors. Secondary market could be either auction or dealer market. While stock exchange is the part of an auction market, Over-the-Counter (OTC) is a part of the dealer market.

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Net Asset Value

NAV: Net Asset Value of the fund is the cumulative market value of the fund net of its liabilities. NAV per unit is simply the net value of assets divided by the number of units out standing. Buying and Selling into funds is done on the basis of NAV related prices. The NAV of a mutual fund are required to be published in news papers. The NAV of an open end scheme should be disclosed ona daily basis and the NAV of a closed end scheme should be disclosed atleast on a weekly basis.

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AMALGAMATION AND RECONSTRUCTION

Amalgamation:

 It may be of two types – Amalgamation in nature of merger and amalgamation in nature of Purchase.
 Amalgamation in nature of merger:
If the amalgamation satisfies all following conditions it may be termed as amalgamation in nature of merger. If any one of conditions is not satisfied it will be in nature of purchase.
 All assets and liabilities of Transferor Company become, after amalgamation, the assets of Transferee Company.
 Shareholders holding not less than 90% of the face value of equity shares of transferor company held therein immediately before amalgamation, shall become shareholders of transferee company by virtue of amalgamation.
 The consideration for amalgamation receivable by those equity shareholders of the transferor company who agree to become equity shareholders of transferee company is discharged by the transferee company wholly by issue of equity shares in transferee company except that cash may be paid in respect of fractional shares.
 The business of Transferor Company is intended to be carried on, after the amalgamation, by the transferee company.
 No adjustment is intended to be made to book values of assets and liabilities of Transferor Company when they are incorporated in financial statements of Transferee Company except to ensure uniformity of accounting policies.

 Methods of Accounting of Amalgamations:

 Pooling of Interests method: (Merger method)
The assets, liabilities and reserves of Transferor Company are recorded by the transferee company at existing carrying amounts after adjusting for uniform accounting principles.

The reserves are preserved in case of this method in the same form as it appeared in financial statements of transferor company. The difference between share capital issued and amount of share capital of transferor company is adjusted in reserves.


 Purchase method:
Transferee company Incorporates assets and liabilities of transferor company on basis of fair values.
The identity of reserves other than statutory reserves like investment allowance reserve, development allowance reserve is not preserved. Difference may be termed as goodwill/capital reserve.
The amount of consideration is deducted from the value of net assets of transferor company if result is negative it is goodwill otherwise capital reserve.
The statutory reserve is recorded by giving a debit to amalgamation adjustment account under misc. expenditure on assets side.

 Treatment of Goodwill on amalgamation:

Goodwill shall be written off over a period of 5 years unless justified for longer period.

 Balance of Profit and Loss account:

In case of merger balance is aggregated with corresponding balance in transferee company.

In case of purchase it loses its identity.


 PURCHASE CONSIDERATION:

The purchase consideration represents the amount payable in the form of securities/cash by the transferee company to shareholders of Transferor Company. The calculation of PC may be based on following methods:

 Lump sum Payment: A consolidated lump sum amount may be agreed.
 Net Assets Method: Under this method intrinsic value of share which may include value of goodwill, shall be ascertained and exchange ratio will be computed.
 Net Payment Method: Under this method different amounts are agreed to be paid to shareholders of Transferor Company. Some of these payments represent purchase consideration.
 Other methods: May include the method based on earnings, market value of share or fair value of share etc.

 Other Notes:
 Cost of amalgamation, discharge of debentures etc. shall not be included in purchase consideration.
 When the transferee company holds some shares in transferor company the purchase consideration is amount payable to outside sundry shareholders.
 When transferor company holds some shares in transferee company the number of shares to be issued by transferee company under the scheme of amalgamation shall be reduced by no of shares held by transferor company.
 When both the companies are holding in both of the shares the above two points shall be effected.
 In case of fraction of shares there will be cash settlement.

JOURNAL ENTERIES IN THE BOOKS OF TRANSFEROR COMPANY:

 BEFORE MERGER:

 For Revaluation of Investments in Equity shares of Transferor co held by Transferee co, if any:

If appreciated:
Investment A/c Dr
To General Reserve a/c.
Otherwise reverse.

 For declaration of dividend by transferee company just before merger:

P/L a/c Dr
To Dividends payable a/c

 ENTERIES FOR AFFECTING AMALGAMATION:

 For Purchase consideration payable:

Business Purchase a/c Dr
To Liquidator of Transferor Co a/c

 For Taking over various assets and Liabilities:

In case of Merger:
Assets a/c Dr (Book Value)
To Liabilities (Book Value)
To Reserves
To Investments (if any)
To Business Purchase




In case of Purchase:
Assets a/c Dr(Agreed Value)
To Liabilities -do-
To Investments (if any)
To Business purchase
(Any difference in above entry shall be Goodwill(Dr)/Capital Reserve(Cr))

 For Discharge of Consideration:

Liquidator of transferor co Dr
To ESC
To PSC
To Debentures (if any)
To Bank
To Securities Premium

 ENTRIES AFTER AMALGAMATION:

 For Adjusting unrealized profits on goods transfer:

P/L / Goodwill or Capital Reserve Dr
To Stock in Trade

 For Adjusting inter co Owings/mutual indebt ness:

Creditors/B/P/Loan Dr
To Debtors/B/R/Loan

 For Cancellation of Dividend:

Proposed Dividend Dr (Proposed dividend cancellation)
To P/L

OR
Dividends Payable Dr (Adjustment of dividends declared)
To Dividends Receivable


 Adjustments for conformity uniform accounting policies shall be done. It may be anything like for eg. Investment may be quoted at MV in one company and at cost in other or change in depreciation rates of two companies. It may not be given in the problem we have to look at balance sheet and then decide.


 For discharge of debentures of Transferor co:

Debentures Dr(Transferor co)
To Debentures (Transferee co)

 The difference if any shall be accounted to reserve in case of amalgamation in the nature of merger, goodwill/capital reserve in nature of purchase.

 For expenses of amalgamation paid by transferee company:

Reserves/GW/CR Dr
To Cash/Bank

 OTHER IMPORTANT NOTES:

 In case the two companies are merged into another third company which becomes holding company then while showing the balance sheet of holding company we have to be careful as all assets and liabilities will not be amalgamated into C Ltd. Show the share capital issued to Transferee Company on liabilities side and show as investments on the assets side.
 When holding company takes over subsidiary company it is merger whereas if subsidiary company takes over holding company it is reverse merger.
 If exchange ratio is not given in the problem then we have to find out by simultaneous equation method.
 Goodwill or capital reserve will arrive only if goodwill is there in valuation of net assets.
 Replacement value is always the highest and realizable value is least.
 In case of Reconstruction, we open capital reduction account and transfer all gains and reduction of loans and creditors, shares claims and then transfer of opposite entry of losses brought forward and balance shall be transferred to capital reserve account if any.

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VALUATION OF SHARES

Equity Shares:

 Net Assets Method
 Earnings Yield Method
 Dividend Yield Method
 Fair Value

Net Assets Method:

o Net Assets / No of Equity shares outstanding
o Value of Partly paid up shares = Value of Fully paid up as above – Unpaid call per share
o Net assets = Capital Employed as calculated in Goodwill + Non Trade Investments + Calls in arrears + Goodwill as per valuation
o No of shares outstanding if there are different face values then Net assets shall be divided by whole paid up capital and then multiplied by appropriate paid up capitals of different face values
o In case of value of share, dividends may be excluded to give ex-dividend value, alternatively dividends may be included as part of net assets to give cum-dividend value.

Earnings Yield Method: (FOR LARGE BLOCK)

o (Earnings Yield Rate/NRR) x Paid up value of Share
o Earnings Yield rate = (Earnings may be average available to equity / Total Equity) x 100
o Normal rate of return is adjusted to 0.5% increased or decreased according to situations if not satisfied.
o While determining EYR the transfer to reserves if any shall be considered it means that the profits otherwise available for payment of dividend i.e divisible profits shall be taken into account.
o In case of yield valuation it is always cum-dividend value.

Dividends Yield Method: (FOR SMALL BLOCK)

o (Dividend Yield Rate/NRR) x Paid up value of Share
o Dividends Yield rate = Dividend rate may be average

Fair Value Method: (FOR CONTROLLING INTEREST)

Average of Net Assets Value and Earnings Yield Value.

Preference Shares are valued on Dividend Yield method.


NOTES :

 Capital Gearing Ratio = (Long term debts + Preference Capital) / Equity shareholder funds. High capital gearing ratio more risky.
 High Interest dividend coverage ratio less risky.
 Whenever Problem asks something about performance of a company we have to calculate some ratio based on the data given.
 Investments in Subsidiaries is always trade investments
 Opening Networth + Adjusted PAT = Closing Net worth

CONSOLIDATION (AS -21)


 Holding Company: A company which controls is holding.

 Subsidiary Company: A company which is been controlled is subsidiary.

 X is a holding of Y, Y is holding of Z, then Z is sub subsidiary of X.

 Time period difference of presentation of financial statements is 6 months for holding and subsidiary companies.

 Methods of Presentation of Investment of Subsidiary in B/S of Holding Company:

 Cost Method : This is followed as per Indian Accounting standard. Here Pre acquisition dividend is reduced from cost of investment, whereas post acquisition dividend shown as revenue profits. It is always long term investment shown @ cost as per AS 13.

 Equity Method: Here share of profit is accounted notionally by giving debit to Investment and credit to Profit and Loss account. And whenever dividends are received Investment account is credited as we have already accounted for profit.


 Dates of Acquisition are very important in Holding Company accounts.

PROCESS OF CONSOLIDATION

 The equity of subsidiary company will not be shown in consolidated balance sheet as it is and shall be eliminated fully.

 The investments held by holding companies in subsidiary companies shall be eliminated fully in the consolidated balance sheet. Conceptually in the balance sheet of holding company the investments are replaced by the net assets of subsidiary companies.

 When all the shares of subsidiary company are not held by holding companies there arises a question of minority shareholders. Therefore minority interest shall be computed and presented separately as last item in liabilities side of balance sheet.

Calculation of Minority interest:

Proportionate share in paid up share capital xxx
Add/Less: Proportionate share in the profits/lossess of subsidiary
Company xxx

Minority Interest xxx

In case the proportionate loss attributable to minority shareholders in subsidiary company exceeds share capital, there arises a debit balance. To the extent collectable from minority shareholders under obligation it will be shown on assets side of balance sheet. The balance shall be adjusted to majority interest. When the profits earned in later periods by subsidiary company it will be absorbed fully by majority till the earlier losses are set off.

 When the amount of investment is in excess of proportionate equity it is referred to as goodwill. When the amount of investment is less than the proportionate equity the result is known as capital reserve. It will be calculated as under.

 Pre-acquisition profits:

For the purpose of calculation of goodwill/capital reserve the profits of subsidiary company shall be classified between pre acquisition and post acquisition period. The following is the procedure:

 Ascertain the date of acquisition. Usually it is not a problem. However when the shares are acquired, the date on which the company has become holding company for the first time is date of acquisition. When there are numerous number of dates go by practical date.

 Ascertain the profits as on the above date. This may be given in the problem. However when the date of acquisition is not coinciding with the beginning or the end of the year and profit figures are not available exactly on the date of acquisition, we should take the profits on previous reporting date. For the balance period the profits may be classified on time ratio basis , assuming that profits ate earned evenly throughout the year.

 There could be some appropriations between the date of acquisition and balance sheet date. The likely appropriations are capitalization of profits i.e. bonus shares and dividends.

 The proper adjustment has to be done for bonus shares. The adjustment is effect the profits from which these are issued and increase the number of shares held by holding company and minority shareholders.

 In case of dividend the profits of that particular year for which dividends are paid shall be effected as far as holding company is concerned any dividends received for the pre-acquisition period shall be credited to investment account and post acquisition shall be credited to profit and loss account.

 Having ascertained the pre-acquisition portion of profits a comparison will be made with balance sheet figures. Any changes there on shall be taken as post acquisition.

 There will be some more adjustments to be affected during analysis of profits. They are

a. Revaluation of fixed assets: Usually the revaluation takes place on the date of acquisition. Therefore revaluation profit/loss shall be taken as pre-acquisition. However any depreciation after that revaluation shall be taken as post-acquisition.

b. Rectification of Errors: According to period adjustment shall be made.

c. Abnormal Events/transactions : According to period adjustment shall be made

d. Proposed dividends for current year : It shall be adjusted to the current year profits. In case a portion of current year profit taken as pre-acquisition the dividends also shall be treated like that proportionately.


 The following is the methodology in presenting consolidated balance sheet.

A minimum of 4 working notes shall be prepared as follows:

 Analysis of profits of subsidiary company
 Calculation of goodwill/capital reserve.
 Calculation of minority interest.
 Consolidated profits and reserves

While consolidating balance sheet items of balance sheet are to be consolidated on line by line basis i.e. likewise items of balance sheet are to be shown together. Any inter company owings/transactions shall be eliminated fully.

 Consolidation of Profits/Reserves:

 Take the amount of profits and reserves from the holding company balance sheet
 Add share of holding company in post acquisition profits in subsidiary company.
 The following are the likely adjustments:
a. Pre-acquisition dividends wrongly credited, if any shall be deducted.
b. Unrealized profit on stock shall be deducted
c. Unrealized profit on transfer of fixed assets shall be deducted.
d. Proposed dividend of holding company for current year, if any shall be deducted.


Notes:

 To cross verify consolidated balance sheet total please total all the balance sheets of holding subsidiary and make adjustments of assets side only i.e. removal of investments in subsidiaries addition of goodwill and removal of inter company etc.
 To cross verify group profits = Total Profits – Pre-Acquisition – Minority Profits

 Consolidation of Profit and Loss account:
For this purpose all revenue items are to be considered by line by line basis by adjusting inter-company transactions. All inter-company transactions shall be eliminated fully. Any unrealized profit in stock of goods shall be adjusted. It is also necessary to eliminate share of holding company in proposed dividend of subsidiary. It is also necessary to eliminate Minority interest profit in group profits.

To summarize following procedure may be adopted:
1. Provide 1 column each for Holding and subsidiary, 1 column to show adjustments and 1 column to show consolidated figures.
2. Inter-company transactions have to be eliminated by incorporating in adjustments column appropriately.
3. Find out profit of each company and consolidate in the normal way.
4. Provide for the following:
a) Stock reserve if any.
b) Pre acquisition profit transfer to cost of control.
c) Minority interest.

 Revenue of the subsidiary company shall be restated in case the different accounting policies are followed by subsidiary and holding company.

 Different Reporting Dates:
A situation will arise in which reporting dates of holding and subsidiary companies are different. In that situation subsidiary company often prepare, for consolidation purpose financial statement as at same date holding company prepares. When such statements cannot be prepared financial statements drawn upon different date may be used provided the difference is not more than 6 months. However adjustments shall be made for the effects of any significant event or intra-group transactions that occur between the date.

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VALUATION OF GOODWILL

. Methods for Valuation of Goodwill:

 Capitalisation Method
 Super Profits Method
 Annuity Method

Capitalization Method Steps:

o Future Maintainable Profits (FMP)
o Normal Rate of Return (NRR)
o Normal Capital Employed (NCE = FMP/NRR)
o Actual Capital Employed (ACE)
o Goodwill = NCE – ACE

Super Profits Method Steps:

o Average Capital Employed (Avg CE)
o NRR
o Normal Profits (NP = Avg CE x NRR)
o FMP
o Super Profits (SP = FMP – NP)
o Goodwill = SP x No of Years

Annuity Method Steps:

o SP
o Goodwill = SP x Annuity Factor

II. Capital Employed:

 Liabilities Side Approach = Equity Share Capital + Reserves and Surplus – Non Trading Assets – Misc Expenditure (+/-) Adjustments in values of Assets or Liabilities

 Assets Side Approach = Total Assets (Excld Misc Expenditure and Non Trading Assets) – Outside Liabilities – Preference Share Capital



Notes:

o Non Trading assets shall be excluded (Investments mentioned in the balance sheet shall be excluded, if nothing is mentioned assume it as non trading investments. If nothing is given regarding purchase date of investment it is assumed it is purchased at the beginning of the year.
o Asset must be taken at current cost. If nothing is mentioned take value given in the balance sheet.
o If we already have goodwill in balance sheet that shall be excluded.
o Proposed dividend is not an outside liability whereas preference dividend is an outside liability. (Appearing in Balance Sheet)
o Dividend Paid last year if there is no proposed dividend then the dividend paid shall be taken into consideration for capital employed.
o Sinking Fund is a part of Reserves and Surplus
o Workmen’s Compensation fund is a part of Shareholders fund.
o Preference shares are treated as cumulative and non-participating if nothing is mentioned
o Unclaimed dividend is considered as outside liability it is different from proposed dividend.
o If the profits for past and profits for future are given we have to take profits of future for FMP. And less weightage shall be allotted to future profits.
o Gratuity fund, workmen’s compensation fund is a outside liability.
o Capital Employed for Long term funds = Capital Employed as calculated above + Loans and Preference Share Capital
o Difference in Balance sheet is outside liability if it appears on liability side and assets if vice versa.

III. Average Capital Employed:

o If two balance sheets are given
= Closing Capital Employed + Opening Capital Employed
2
o If more than 2 years are given calculate first for two balance sheets then take consolidated average of all.
o If only one balance sheet is given then
= Closing Capital Employed – ½ of Current Year Profit







IV. Normal Rate of Return:

o Without taking any risk the return we get.
o Last year dividend paid % is given in the problem along with the closing market price then we have to calculate NRR as follows:
FV * Dividend Rate %
MP
o If average price is given instead of the market price then average dividend rate shall be used to calculate NRR

V. Future Maintainable Profits:

o Calculate average profits of past years which represent tomorrow (futures); if there is a trend in profits (it is better to take trend in profit % on sales if sales is also given) take weighted average, otherwise simple average.
o Only Net Operating Profit shall be taken into consideration i.e. profit available to Equity Shareholders.
o Only Profits of Normal Years shall be taken into consideration i.e. abnormal transactions shall be eliminated.
o We have to adjust future likely expenses / income / tax rate.
o If direct profits not given increase in general reserve balance can be taken as profit.
o If profits of past and profits for future are given we have to take profits of future for FMP and less weightage shall be given for more future.

VI. Leverage effect:

o If goodwill of Long Term Funds is lower than that of Shareholders fund then it is a favorable leverage effect.

General Notes:

o Any contention asked in problem regarding doubtful of goodwill try all methods for valuation of goodwill.
o If nothing is mentioned in the problem calculate super profits method.
o Capitalization method is more appropriate if capital is important factor. (i.e. Conversion of Pvt into public)

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HUMAN RESOURCE ACCOUNTING

Total value of Human Capital is to be found out by

 Assuming all employees are starting from that age group (i.e. starting from same age) and end at the last age.

 Multiply average earnings with PVF.

 Multiply the present value earnings with total no of employees.

 Aggregate all present values to get value of Human Capital of a particular category.


ECONOMIC VALUE ADDED (EVA)

EVA = Net Operating Profit After Tax – Weighted Average Cost of Capital
= NOPAT – WACC

Where :-

NOPAT = PAT + Interest (+/-) Extraordinary Items

WACC = (Equity/Cap Emp) * Ke + (Pref Shares/Cap Emp) * Kp + (Debt/Cap Emp) * Kd

Where:-

Ke = Cost of Equity = Irf + Beta ( Irm – Irf)

Kd = Cost of Debt = [Interest(1-Tax Rate)/Long Term Borrowings] * 100

Note :

 If multiple Beta are given take Highest

 Capital Employed = Assets – Outside Liabilities (or) Total capital i.e Equity + Pref + Debt

 If market capitalization is given for equity that amount shall be considered for calculating rate of WACC on total capital employed. However while calculating WACC we take book value of equity.


FUND BASED ACCOUNTING ( NON PROFIT ORGANISATION)

Statement of Income and Expenditure

 Shall be prepared for Unrestricted fund and Restricted Fund.

 Restricted Funds receipts shall be accounted to the extent it is used.

 Transfers shall be separately presented.

Statement of Changes in Fund Balance

Balance shall be arrived by Opening Balance + Additions – Deductions (+/-) Transfers.

It shall be prepared for various funds Restricted funds, Endowment , Development funds etc.

Individual Balance sheets shall be prepared for each fund and a general balance sheet shall be prepared for Unrestricted funds.

Notes:

 Advances paid for purchase of land and payments to contractors for construction of buildings shall be shown directly in Balance sheet.

 Assets completed shall be transferred to general / unrestricted fund.

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Buy Back Securities

Introduction
Buy Back of Securities is done by the company with the purpose to improve liquidity in its shares and enhance the shareholders’ wealth. Under the SEBI (Buy Back of Securities) Regulations, 1998.
The company has to disclose the pre and post-buy back holdings of the promoters. To ensure completion of the buyback process speedily, the regulations have stipulated time limit for each step. For example, in the cases of purchases through stock exchanges, an offer for buy back should not remain open for more than 30 days. The verification of shares received in buy back has to be completed within 15 days of the closure of the offer. The payments for accepted securities has to be made within 7 days of the completion of verification and bought back shares have to be extinguished and physically destroyed within 7 days of the date of the payment. Further, the company making an offer for buy back will have to open an escrow account on the same lines as provided in takeover regulations.

Objectives of Buy Back
Shares may be bought back by the company on account of one or more of the following reasons
i. To increase promoters holding
ii. Increase earning per share
iii. Rationalize the capital structure by writing off capital not represented by available assets.
iv. Support share value
v. To thwart takeover bid
vi. To pay surplus cash not required by business
Infact the best strategy to maintain the share price in a bear run is to buy back the shares from the open market at a premium over the prevailing market price.

Sources of Buy Back
Section 77B provides three sources to Buy Back its own shares or other specified securities out of three sources:
1. Free reserves
2. Securities premium account
3. Proceeds of an earlier issue of shares or other specified securities. [Section 77A(l), The Company's Act 1956].
Buy back of any kind of shares is not allowed out of the proceeds of any earlier issue of the same kinds of shares.
1. Free reserve
The term free reserve has been defined to carry same meaning as has been assigned in clause (b) of Explanation to section 372A of The Company’s Act 1956. For the purpose of section 372A the term ‘free reserve’ has been defined as those reserves which as per the latest audited balance sheet are free for distribution as dividend and it includes balance of securities premium account. Free reserve means the balance in the share premium account, capital and debenture redemption reserves shown or published in the balance sheet of the company and created by appropriation out of the profits of the company.
2. Securities premium Account
Securities Premium Account is a broader term than Share Premium Account. Share Premium account represents only premium on issue of equity and preference shares, whereas securities premium account represents premium on issue of debentures, bonds and other financial instruments.
3. Proceeds of an earlier issue
Buy back of shares of any kind is not allowed out of fresh issue of shares of the same kind. If it were so, it would frustrate the very purpose of buy back. Fresh issue of equity shares for buying equity makes no financial sense. However, financial logic of buy back could very well be served if preference shares are issued and proceeds are used for buying back equity shares.
• Preference shares carry fixed rate of dividend. Also they are easy to market.
• Preference shares may give better yield to the investor than after tax yield on loan or debentures. At the same time it is possible to lever the capital structure by slimming the dividend paying equity.
That apart buy back of shares is allowed utilizing proceeds of an earlier issue. Proceeds of an earlier issue is an unqualified term. Any issue means any issue of hybrid instruments, debentures, bonds, secured and unsecured loans etc. Thus buy back of equity shares is allowed byissue of any pure or hybrid debt instruments.
Then appropriate source of buy back should be the following if the intention is to swap equity for debt or fixed income bearing instruments:
• Issue of debentures;
• Issue of loans.
Condition for Buy Back
(1) No company shall purchase its own shares or other specified securities under sub-section (1), unless-
(a) the buy-back is authorised by its articles;

(b) a special resolution has been passed in general meeting of the company authorising the buy-back:
Provided that nothing contained in this clause shall apply in any case where-
(A) the buy-back is or less than ten per cent, of the total paid-up equity capital and free reserves of the company; and

(B) such buy-back has been authorized by the Board by means of a resolution passed at its meeting:
Provided further that no offer of buy-back shall be made within a period of three hundred and sixty-five days recokned from the date of the preceding offer of buy-back, if any.

Explanation.-For the purposes of this clause, the expression "offer of buy-back" means the offer of such buy-back made in pursuance of the resolution of the Board referred to in the first proviso;]
(c) the buy-back is or less than twenty-five per cent of the total paid-up capital and free reserves of the company:
Provided that the buy-back of equity shares in any financial year shall not exceed twenty-five per cent of its total paid-up equity capital in that financial year;
(d) the ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back:
Provided that the Central Government may prescribe a higher ratio of the debt than that specified under this clause for a class or classes of companies.

Explanation.-For the purposes of this clause, the expression "debt" includes all amounts of unsecured and secured debts;
(e) all the shares or other specified securities for buy-back are fully paid-up;

(f) the buy-back of the shares or other specified securities listed on any recognised stock exchange is in accordance with the regulations made by the Securities and Exchange Board of India in this behalf;

(g) the buy-back in respect of shares or other specified securities other than those specified in clause (f) is in accordance with the guidelines as may be prescribed.
(2) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an explanatory statement stating-
(a) a full and complete disclosure of all material facts; -.

(b) the necessity for the buy-back;

(c) the class of security intended to be purchased under the buy-back;

(d) the amount to be invested under the buy-back; and

(e) the time limit for completion of buy-back.
(3) Every buy-back shall be completed within twelve months from the date of passing the special resolution or a resolution passed by the Board .

(4) The buy-back may be-
(a) from the existing security holders on a proportionate basis; or

(b) from the open market; or

(c) from odd lots, that is to say, where the lot of securities of a public company, whose shares are listed on a recognized stock exchange, is smaller than such marketable lot, as may be specified by the stock exchange; or

(d) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat equity.
(5) Where a company has passed a special resolution under clause (b) of sub-section (2) 4[or the Board has passed a resolution under the first proviso to clause (b) of that sub-section] to buy-back its own shares or other securities under this section, it shall, before making such buy-back, file with the Registrar and the Securities and Exchange Board of India a declaration of solvency in the form as may be prescribed and verified by an affidavit to the effect that the Board has made a full inquiry into the affairs of the company as a result of which they have formed an opinion that it is capable of meeting its liabilities and will not be rendered insolvent within a period of one year of the date of declaration adopted by the Board, and signed by at least two directors of the company, one of whom shall be the managing director, if any:

Provided that no declaration of solvency shall be filed with the Securities and Exchange Board of India by a company whose shares are not listed on any recognised stock exchange.

Duties/Responsibility
A. Where a company buy-back its own securities, it shall extinguish and physically destroy the securities so bought-back within seven days of the last date of completion of buy-back.
B. Where a company completes a buy-back of its shares or other specified securities under this section, it shall not make further issue of the same kind of shares (including allotment of further shares under clause (a) of sub-section (1) of section 81) or other specified securities 5[within a period of six months] except by way of bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity shares.
C. Where a company buy-back its securities under this section, it shall maintain a register of the securities so bought, the consideration paid for the securities bought-back, the date of cancellation of securities, the date of extinguishing and physically destroying of securities and such other particulars as may be prescribed.
D. A Company shall, after the completion of the buy-back file with the Registrar and the Securities and Exchange Board of India, a return in form 4 C containing such particulars relating to the buy-back within thirty days of such completion.
No return shall be filed with the Securities and Exchange Board of India by an unlisted company.


Precausion of Buy Back
While approving the buy back resolution the following points should be carefully scrutinized as regards cash flow linkage of free reserve and securities premium account as they are not necessarily represented by free cash:
• How much of the free reserve and securities premium account are readily available in the form of free cash?
• Whether owned investments in current assets are released for buy back? If so, its impact on current ratio?
• Whether non-trade investments will be disposed to generate free cash? If yes, what is the possible profit/loss?
• If trade investments are proposed to be sold, what is the possible adverse impact on operating activities?
• If any fixed assets are sold, whether it has been intended to reduce the scale of operation of the company
Penalty
The company or any officer of the company, who is in default shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to fifty thousand rupees, or with both.




Provision as per Companies Act.
77A. Power of company to purchase its own securities
(1) Notwithstanding anything contained in this Act, but subject to the provisions of sub-section (2) of this section and section 77B, a company may purchase its own shares or other specified securities (hereinafter referred to as "buy-back") out of-
(i) its free reserves; or

(ii) the securities premium account; or

(iii) the proceeds of any shares or other specified securities:
Provided that no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.

(2) No company shall purchase its own shares or other specified securities under sub-section (1), unless-
(a) the buy-back is authorised by its articles;

(b) a special resolution has been passed in general meeting of the company authorising the buy-back:
2[Provided that nothing contained in this clause shall apply in any case where-
(A) the buy-back is or less than ten per cent, of the total paid-up equity capital and free reserves of the company; and

(B) such buy-back has been authorised by the Board by means of a resolution passed at its meeting:
Provided further that no offer of buy-back shall be made within a period of three hundred and sixty-five days recokned from the date of the preceding offer of buy-back, if any.

Explanation.-For the purposes of this clause, the expression "offer of buy-back" means the offer of such buy-back made in pursuance of the resolution of the Board referred to in the first proviso;]
(c) the buy-back is or less than twenty-five per cent of the total paid-up capital and free reserves of the company:
Provided that the buy-back of equity shares in any financial year shall not exceed twenty-five per cent of its total paid-up equity capital in that financial year;
(d) the ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back:
Provided that the Central Government may prescribe a higher ratio of the debt than that specified under this clause for a class or classes of companies.

Explanation.-For the purposes of this clause, the expression "debt" includes all amounts of unsecured and secured debts;
(e) all the shares or other specified securities for buy-back are fully paid-up;

(f) the buy-back of the shares or other specified securities listed on any recognised stock exchange is in accordance with the regulations made by the Securities and Exchange Board of India in this behalf;

(g) the buy-back in respect of shares or other specified securities other than those specified in clause (f) is in accordance with the guidelines as may be prescribed.
(3) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an explanatory statement stating-
(a) a full and complete disclosure of all material facts; -.

(b) the necessity for the buy-back;

(c) the class of security intended to be purchased under the buy-back;

(d) the amount to be invested under the buy-back; and

(e) the time limit for completion of buy-back.
(4) Every buy-back shall be completed within twelve months from the date of passing the 3[special resolution or a resolution passed by the Board] under clause (b) of sub-section (2).

(5) The buy-back under sub-section (1) may be-
(a) from the existing security holders on a proportionate basis; or

(b) from the open market; or

(c) from odd lots, that is to say, where the lot of securities of a public company, whose shares are listed on a recognised stock exchange, is smaller than such marketable lot, as may be specified by the stock exchange; or

(d) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat equity.
(6) Where a company has passed a special resolution under clause (b) of sub-section (2) 4[or the Board has passed a resolution under the first proviso to clause (b) of that sub-section] to buy-back its own shares or other securities under this section, it shall, before making such buy-back, file with the Registrar and the Securities and Exchange Board of India a declaration of solvency in the form as may be prescribed and verified by an affidavit to the effect that the Board has made a full inquiry into the affairs of the company as a result of which they have formed an opinion that it is capable of meeting its liabilities and will not be rendered insolvent within a period of one year of the date of declaration adopted by the Board, and signed by at least two directors of the company, one of whom shall be the managing director, if any:

Provided that no declaration of solvency shall be filed with the Securities and Exchange Board of India by a company whose shares are not listed on any recognised stock exchange.

(7) Where a company buy-back its own securities, it shall extinguish and physically destroy the securities so bought-back within seven days of the last date of completion of buy-back.

(8) Where a company completes a buy-back of its shares or other specified securities under this section, it shall not make further issue of the same kind of shares (including allotment of further shares under clause (a) of sub-section (1) of section 81) or other specified securities 5[within a period of six months] except by way of bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity shares.

(9) Where a company buy-back its securities under this section, it shall maintain a register of the securities so bought, the consideration paid for the securities bought-back, the date of cancellation of securities, the date of extinguishing and physically destroying of securities and such other particulars as may be prescribed.

(10) A company shall, after the completion of the buy-back under this section, file with the Registrar and the Securities and Exchange Board of India, a return containing such particulars relating to the buy-back within thirty days of such completion, as may be prescribed:

Provided that no return shall be filed with the Securities and Exchange Board of India by a company whose shares are not listed on any recognised stock exchange.

(11) If a company makes default in complying with the provisions of this section or any rules made thereunder, or any regulations made under clause (f) of sub-section (2), the company or any officer of the company who is in default shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to fifty thousand rupees, or with both.

Explanation.-For the purposes of this section,-
(a) "specified securities" includes employees' stock option or other securities as may be notified by the Central Government from time to time;

(b) "free reserves" shall have the meaning assigned to it in clause (b) of Explanation to section 372A.]

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BUDGETING

Definition: Establishing a planned level of expenditures, usually at a fairly detailed level. A company may plan and maintain a budget on either an accrual or a cash basis.
Business budgeting is one of the most powerful financial tools available to any small-business owner. Put simply, maintaining a good short- and long-range financial plan enables you to control your cash flow instead of having it control you.

The most effective financial budget includes both a short-range, month-to-month plan for at least one calendar year and a long-range, quarter-to-quarter plan you use for financial statement reporting. It should be prepared during the two months preceding the fiscal year-end to allow ample time for sufficient information-gathering.

The long-range plan should cover a period of at least three years (some go up to five years) on a quarterly basis, or even an annual basis. The long-term budget should be updated when the short-range plan is prepared.

While some owners prefer to leave the one-year budget unchanged for the year for which it provides projections, others adjust the budget during the year based on certain financial occurrences, such as an unplanned equipment purchase or a larger-than-expected upward sales trend. Using the budget as an ongoing planning tool during a given year certainly is recommended. However, here is a word to the wise: Financial budgeting is vital, but it's important to avoid getting so caught up in the budget process that you forget to keep doing business.

Many financial budgets provide a plan only for the income statement; however, it's important to budget both the income statement and balance sheet. This enables you to consider potential cash-flow needs for your entire operation, not just as they pertain to income and expenses. For instance, if you'd already been in business for a few years and were adding a new product line, you'd need to consider the impact of inventory purchases on cash flow.

Budgeting only the income statement also doesn't allow a full analysis of the effect of potential capital expenditures on your financial picture. For instance, if you're planning to purchase real estate for your operation, you need to budget the effect the debt service will have on cash flow.

In the startup phase, you'll have to make reasonable assumptions about your business in establishing your budget. You will need to ask questions such as:

•How much can be sold in year one?
•How much will sales grow in the following years?
•How will the products and/or services you're selling be priced?
•How much will it cost to produce your product? How much inventory will you need?
•What will your operating expenses be?
•How many employees will you need? How much will you pay them? How much will you pay yourself? What benefits will you offer? What will your payroll and unemployment taxes be?
•What will the income tax rate be? Will your business be an S corporation or a C corporation?
•What will your facilities needs be? How much will it cost you in rent or debt service for these facilities?
•What equipment will be needed to start the business? How much will it cost? Will there be additional equipment needs in subsequent years?
•What payment terms will you offer customers if you sell on credit? What payment terms will your suppliers give you?
•How much will you need to borrow?
•What will the collateral be? What will the interest rate be?
As for the actual preparation of the budget, you can create it manually or with the budgeting function that comes with most bookkeeping software packages. You can also purchase separate budgeting software such as Quicken or Microsoft Money.

The first step is to set up a plan for the following year on a month-to-month basis. Starting with the first month, establish specific budgeted dollar levels for each category of the budget. The sales numbers will be critical since they'll be used to compute gross profit margin and will help determine operating expenses, as well as the accounts receivable and inventory levels necessary to support the business. In determining how much of your product or service you can sell, study the market in which you operate, your competition, potential demand that you might already have seen and economic conditions. For cost of goods sold, you'll need to calculate the actual costs associated with producing each item on a percentage basis.

For your operating expenses, consider items such as advertising, auto, depreciation, insurance and so on. Then factor in a tax rate based on actual business tax rates that you can obtain from your accountant.

On the balance sheet, break down inventory by category. For instance, a clothing manufacturer has raw materials, work-in-progress and finished goods. For inventory, accounts receivable and accounts payable, you'll figure the total amounts based on a projected number of days on hand.

Consider each specific item in fixed assets broken out for real estate, equipment, investments and so on. If your new business requires a franchise fee or copyrights or patents, this will be reflected as an intangible asset.

On the liability side, break down each bank loan separately. Do the same for the stockholders' equity--common stock, preferred stock, paid-in-capital, treasury stock and retained earnings.

Do this for each month for the first 12 months. Then prepare the quarter-to-quarter budgets for years two and three. For the first year's budget, you'll want to consider seasonality factors. For example, most retailers experience heavy sales from October to December. If your business will be highly seasonal, you'll have wide-ranging changes in cash-flow needs. For this reason, you'll want to consider seasonality in the budget rather than take your annual projected year-one sales level and divide by 12.

As for the process, you need to prepare the income statement budgets first, then balance sheet, then cash flow. You'll need to know the net income figure before you can prepare a pro forma balance sheet because the profit number must be plugged into retained earnings. And for the cash-flow projection, you'll need both income statement and balance sheet numbers.

Whether you budget manually or use software, it's advisable to seek input from your CPA in preparing your initial budget. Your CPA's role will depend on the internal resources available to you and your background in finance: You may want to hire a CPA to prepare the financial plan for you, or you may simply involve them in an advisory role. Regardless of the level of involvement, your CPA's input will prove invaluable in providing an independent review of your short- and long-term financial plan

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Accounting Abbreviations or Definitions

90DSAC Ninety Days, Same As Cash
A&AR Accounting and Auditing Releases
A/C Account Current
AAA Accumulated Adjustments Account
AAA American Accounting Association
AAA Association of Accounting Administrators
AAA Authentication, Authorization, and Accounting
AAA-CPA American Association of Attorney - Certified Public Accountants
AACE Audit Analysis Computer Environment
AACTS Arthur Andersen Corporate Technology Solutions
AADA Adjusted Attributable Deposit Amount
AADS Account Authority Digital Signature
AAFA American Association of Finance and Accounting
AAFI Associated Accounting Firms International
AAG Audit and Accounting Guides
AAGR Annual Average Growth Rate
AAHCPA American Association of Hispanic Certified Public Accountants
AAIA Association of Airport Internal Auditors
AALC Accountants and Actuaries Liaison Committee
AAMPS Amtrak Accounting Materials and Purchasing System
AAMS Automated Accounts Management Services
AAN Accounting Audit Notation
AAOC Americas Account Opening Center
AAPR Annualized Average Percentage Rate
AASD Accountability and Accountancy Services Division
AATD Alternative Amount of Tender Deposit
AATD Australian Accounting Taxation Database
ABC Accountability Basics and Control
ABC Analyze Bill and Control
ABCD Actuarial Board for Counseling and Discipline
ABOM Accounting Business and Office Management
ABOM Automated Bill Of Materials
ABR Automated Budget Reallocation
ABREMA Activity Based Risk Evaluation Model of Auditing
ABS Accounting and Billing System
ABTEE Annualized Before Tax Expense Equivalent
AC Additional Charge
AC All Current
ACA Accreditation Council for Accountancy
ACA Actual Cost Adjustment
ACAP Accounting Career Awareness Program
ACAT Accreditation Council for Accountancy and Taxation
ACAT Automated Customer Account Transfer
ACATS Automated Customer Account Transfer Service
ACATS Automated Customer Account Transfer System
ACB Automated Clearing Bureau
ACC DET Account Details
ACCC American Consumer Credit Counseling
ACCPA Atlantic Conference of Certified Public Accountants, Inc.
ACCS Accounting Classification Code Structure
ACCS Advanced Cash Control System
ACE Accountability Creativeness and Efficiency
ACE Accumulated Cash Equivalence
ACE Adjusted Current Earnings
ACFO Association of Canadian Financial Officers
ACH Account Clearing House
ACH Automated Check Handling
ACH Automated Clearing House
ACMA Alternative Compliance Market Account
ACMB ABSA Corporate and Merchant Bank
ACMB Accounting Control Management Behavior
ACP Activities Channels and Pools
ACP Annual Compensation Payment
ACP Anticipated Cash Provider
ACP Average Conditional Probability
ACP Average Contribution Percentage
ACPU Average Cost Per Unit
ACR Adjusted Community Rate
ACRA Accounting and Corporate Regulatory Authority
ACRI Accounting Careers Recruitment Initiative
ACRS Accelerated Cost Recovery System
AcSEC Accounting Standards Executive Committee
ACT Automated Credit Transfer
ACTS Automated Card Tracking System
ACU Automatic Client Update
ACV Actual Cash Value
ACV Annualized Contract Value
ACW ATM Cash Withdrawal
ADD Audit and Due Diligence
ADDACS Automated Direct Debit Amendment And Cancellation Service
ADI After Date of Invoice
ADIF Accounting Data Interchange Format
ADJ Adjust
ADL Add Lot
ADM Above Dealer MSRP (Manufacturers Suggested Retail Price)
ADM Automatic Deposit Machine
ADP Actual Deferral Percentage
ADP Average Deferral Percent
ADR Accounting Department Revenue
ADR American Deposit Receipts
ADR Asset Depreciation Range
ADR Average Daily Rate
ADS Alternative Depreciation System
AE Actual Expense
AEC Annual Equivalent Capital
AEC Average Efficiency Cost
AECC Accounting Education Change Commission
AEI Average Earnings Index
AEPU Average Expense Per Unit
AEPU Average Expense Per User
AER Annual Equivalent Return
AEV Alternative Equivalent Value
AFA Accounting Firms Associated, Inc.
AFC Average Fixed Costs
AFDA Allowance For Doubtful Accounts
AFDC Aid to Families with Dependent Children
AFE Authorization For Expenditure
AFE Average Funds Employed
AFF Advanced Fee Fraud
AFI Awaiting Faxed Invoice
AFIP Association of Finance and Insurance Professionals
AFM Accountany and Financial Management
AFN Additional Funds Needed
AFR Applicable Federal Rate
AFS Advanced Farming System
AFSC AFSCME Financial Standards Code
AFT Accounting, Financing, And Taxes
AFTR Applicable Federal Tax Rate
AFTS Automatic Funds Transfer Services
AGA Association of Government Accountants
AGI Accounting Group International
AGI Adjusted Gross Income
AGM Adjusted Gross Margin
AGN Accountants Global Network
AGR Adjusted Gross Revenue
AICPA American Institute of Certified Public Accountants
AIMS Account Information Management System
AIRA Allocated Insurance Reserve Account
AISG Accountants International Study Group
ALCO Asset/Liability Management Committee
ALE Account Level Equivalence
ALF Annual Licensing Fee
ALICE The American Legislative Issue Campaign Exchange
ALLL Allowance for Loan and Lease Losses
ALR Active Life Reserves
AM Account Monitoring
AMA American Management Association
AMAP Advanced Management Accounting Program
AMT Alternative Minimum Tax
AMTI Alternative Minimum Taxable Income
AN Account Number
ANCM Assets, Non-Current, Monthly
ANCQ Assets, Non-Current, Quarterly
ANP Annualized New Premium
AOB Angels Of Blind
AOI All Other Income
AOP Annual Operational Plan
AOT Adjustment Of Terms
AP Accounts Payable
AP As Purchased
APA American Payroll Association
APB Accounting Principles Board
APBI Accounting Principles Board Interpretations
APBO Accounting Principles Board Opinions
APBS Accounting Principles Board Statements
APC Actual Payment Coefficient
APC Annual Percentage Change
APD Actual Profit Difference
APE Annual Premium Equivalent
API Accountable Property Inventory
API Accountants for the Public Interest
APM Accounts Payable Maintenance
APO Automatic Payment Order
APR Annual Performance Report
APR Annualized Percentage Rate
APR Automatic Payment Receipt
APTF Accounting Policy Task Force
APY Annual Percentage Yield
AR Account Review
AR Annual Return
AR Auto Regressive
ARA Accounting Research Association
ARA Agency Reimbursement Amount
ARAF Associated Regional Accounting Firm
ARB Accounting Research Bulletins
ARC Accounting Regulatory Committee
ARIA Accounting Researchers International Association
ARM 3/1 Adjustable Rate Mortgage, 3 years overall, adjustable every 1 year
ARN Account Reference Number
ARO After Receipt of Order
ARO Asset Retirement Obligation
ARO Attribute Resolution Order
ARP Automatic Remittance Processing
ARPU Average Retail Per User
ARPU Average Revenue Per Unit
ARSC Accounting and Review Services Committee
ARTC Accounts Receivable Truncated Checks
ARV Approximate Retail Value
ARV Average Retail Value
ASAE American Society of Association Executives
ASB Auditing Standards Board
ASCII American Standard Code for Information Interchange
ASET Anonymous and Secure Electronic Transaction
ASLGU Audits of State and Local Governmental Units
ASM Account Services Management
ASQ Allowable Sale Quantity
ASQ Annual Saleable Quantity
ASR Accounting Series Releases
ASWA American Society of Women Accountants
AT After Tax
AT Automatic Transfer
ATB Accounting Terminology Bulletins
ATC Accountancy Training Centre
ATC Average Total Costs
ATF After The Flat
ATL Above The Line
ATO Asset Turnover
ATRA American Tort Reform Association
AUD-SOP Auditing Standards Division Statements of Position
AUDSEC Auditing Standards Executive Committee
AUG Industry Audit Guides
AUI Auditing Interpretations
AURA Accounting Unit Reporting Application
AV Accepted Value
AV Actual Value
AVC Account Validation Check
AVC Added Voluntary Contribution
AVC Average Variable Costs
AW Assessed With
AWCA African Women Chartered Accountants
AWCF Army Working Capital Fund
AWP Average Wholesale Price
AWS Annual Wage Supplement
AWSCPA American Woman's Society of Certified Public Accountants
AWW Average Weekly Wages
B/O On Behalf Of ....
BA Balance Accounting
BA Banker's Acceptance
BA Business Associate
BAC Budgeted At Completion
BACS Bank Automated Clearing System
BARS Budgeting Accounting and Reporting Systems
BAS Business Activity Statement
BAVL Budget Availability
BBA Basic Banking Account
BBA Budget Balance Available
BBAISR British Bankers Association Interest Settlement Rate
BBP Budgeting and Business Planning
BBR Best Bank Rate
BC Before Credit
BC Budget Constraint
BC Buying Criteria
BCBS Basel Committee on Banking Supervision
BCD Balancing Charge Debit
BCD Book Closer Date
BCE Balance
BCIJ Best Cost Individual Join
BCL Bank Credit Letter
BD Bank Draft
BE Bill Of Exchange
BE Budget Entity
BEAM Bonds, Equity, And Money
BEP Break Even Point
BES Bill Enquiry System
BF Bankruptcy Failure
BFI Business Fixed Investment
BFP Basic Formula Price
BG Bank Guarantee
BIC Bank Identification Code
BIC Bank Identifier Code
BIC Beginning Invested Capital
BIMBO Buy In Management Buy Out
BIN Bank Identification Number
BIPS Bank Internet Payment System
BIR Banking Intermediation Rate
BKNG Backing
BKNG Banking
BKPR Bookeeper
BL Bottom Line
BLR Base Lending Rate
BOA Bank Of America
BOE Barrels of Oil Equivalent
BOM Bill Of Materials
BOQ Bill Of Quantities
BOS Bill Of Sale
BP Billing Provider
BP Budget Power
BPI Building Price Index
BPR Business Process Re-Engineering
BRASS Bankruptcy Remote Access Server System
BRB Beam Related Background
BRI Bank Rakyat Indonesia
BS Balance Sheet
BS Bigger Surpluses
BSI Billing System Investigation
BTA Business Travel Allowance
BTP Billing Transformation Program
BU Base Unit
BV Book Value
C Costs
C&F Cost and Freight
CA(SA) Chartered Accountant (South Africa)
CAAT Computer Assisted Auditing Technique
CAD Current Account Deficit
CAF Common Assessment Framework
CAF Credit Application Format
CAFR Comprehensive Annual Financial Report
CAG Cost Ascertainment Group
CAGR Compound Annual Growth Rate
CAGR Cumulative Aggregate Gross Revenue
CAIS Credit Account Information Sharing
CAM Credit Accumulation Mechanism
CAP Competency Assessment Program
CAP Customer Approved Payment
CAPEX CAPital EXPansion
CAPEX CAPital EXpenditure
CAPM Capital Assets Pricing Model
CAPPS Computerized Accounts Payable And Purchasing System
CAPS Corporate Accounts Payable System
CAPS Credit Assessment And Programme Specifications
CAR Capital Acquisition Request
CAR Capital Adequacy Ratio
CAR Compound Annual Return
CAR Compounded Annual Rate
CAR Cumulative Abnormal Returns
CAR Cumulative Average Return
CARD Certificate for Amortizing Revolving Debt
CARR Compound Annual Rate Of Return
CART Committee Appointed Review Team
CAS Composite Accounting System
CAS Comprehensive Annual Statement
CAS Cost Accounting Standards
CASA Canadian Alliance of Student Associations
CASA Citizens Assessment of Structural Adjustment
CASA Clinic Assessment Software Application
CASA Current Accounts and Saving Accounts
CASB Cost Accounting Standards Board
CASH Community Accountancy Self Help
CAT Constant Amortized Time
CAT Cost, Access, and Terms
CATS Customer Account Tracking System
CB Chargeback
CB Cummulative Bulletin
CBA Centrally Billed Accounts
CBIA CIBC (Canadian Imperial Bank of Commerce) Business Interest Account
CBO Congressional Budget Office
CC Card Cash
CC Cash Commodity
CC Cost Center
CC Credit Card
CCA Capital Cost Allowance
CCA Capital Cost Annuity
CCA Commercial Capital Access
CCA Credit Card Action
CCAC Cash Check And Charge
CCC Credit Card Cheque
CCH Commerce Clearing House
CCM Check Control Module
CCP Current COE Price
CCRA Canada Customs and Revenue Agency
CCS Cost of Common Stock
CCS Credit Card Status
CD Cash Disbursement
CD Certificate of Deposit
CDC Clearly Deceptive Calculations
CDCU Corporate Debt Control Unit
CDFI Community Development Financial Institution
CDIP Certificate of Deposit Inflation Protected
CDM Capital Derivatives Management
CDO Collateral Debt Obligation
CDO Collateralized Debt Obligations
CDO Credit Default Option
CDS Credit Default Swap
CDSC Contingent Deferred Sales Charge
CE Continuing Education
CEO Costs Evened Out
CF Cash Flow
CFA Chartered Financial Analyst
CFA Commercial Financing Advance
CFAB Certificate in Finance, Accounting and Business
CFC Controlled Foreign Corporation
CFCP Cash Fund Control Plan
CFCR Capital From Current Revenue
CFCT Cash Flow Cycle Time
CFCU Central Finance And Contracting Unit
CFM Certified Financial Manager
CFO Comprehensive Financial Optimizer
CFP Certified Financial Planner
CFROI Cash-Flow-Return On Investment
CFS Cash Flow Surge
CFS Comprehensive Financial Strategies
CFS Corporate Financial System
CGAA Coordinating Group on Auditing and Accounting Issues
CGL Commercial General Liability
CGL Commonwealth Government Loan
CGR Compound Growth Rate
CGS Credit Gain Services
CHAPS Clearing House Automated Payment System
CHFC Chartered Financial Consultant
CI Compound Interest
CIA Cash In Advance
CIC Chartered Investment Counselor
CICA Canadian Institute of Chartered Accountants
CIF Common Interchange Format
CIF Cost Insurance And Freight
CIMC Certified Investment Management Consultant
CIMS Certified Investment Management Specialist
CIP Carriage and Insurance Paid
CIP Central Investment Program
CIT Cash In Transit
CITC Corporate Income Tax Credit
CK Check
CLADR Class Life Asset Depreciation Range
CLEC Current Liabilities Exceed Cash
CM Compounding Method
CM Contribution Margin
CMA Credit Monitoring Arrangement
CMBS Commercial Money Bank System
CMFC Chartered Mutual Fund Counselor
CMK Consumer Market Knowledge
CMS Cost Management System
CMS Credit Management System
CNC Contract Negotiation Committee
CO Charge Off
COB Cost Of Borrowing
COC Cash On Confirmation
COC Cost Of Capital
COD Cash On Delivery
CODA Cash Or Deferred Arrangement
CODA Cash Or Deferred Arrangement (401K)
COE Cost Of Equity
COG Cost Of Goods
COGS Cost Of Goods Sold
COH Cash On Hand
COI Cost Of Insurance
COL Cost Of Living
COLA Cost Of Living Adjustment
COMET Client Online Mortgage Enquiry Tool
COMPASS Comprehensive Online Management Personnel And Accounting System For Sacramento
COP Cash On Pickup
COP Cost Of Production
COPO Central Order Processing Offices
COPS Computerized Online Payment Service
COPS Cost Of Produced Sales
COSI Cost Of Savings Index
COSO Commission Of Sponsoring Organizations
COSO Committee of Sponsoring Organizations of the Treadway Commission
COT Carry Over Transactions
COW Check Out Wizard
CP Credit Points
CPA Cheapest Price Available
CPA Cost Per Action
CPA/PFS Certified Public Accountant/Personal Financial Specialist
CPA/SEA Certified Public Accountants' Society Executives Association
CPC Customer Profit Contribution
CPE Continuing Professional Education
CPF Central Provident Fund
CPI Cannot Pinpoint Inflation
CPI Cardholder Payment Interface
CPI Consumer Price Index
CPK Certified Purchasing Knowledge
CPM Critical Path Method
CPO Confirmation of Purchase Order
CPP Certified Professional Purchaser
CPR Cash Position Recovery
CPR Constant Prepayment Rate
CPRP Cost Per Rating Point
CPS Cash Payment System
CPS Cost Per Sale
CPT Central Payment Tool
CPT Cost Payment Technique
CPTI Core Pre-Tax Income
CR Cash Receipts
CR Cost Reduced
CRA Cash Recovery Analysis
CRAC Cost Recovery Adjustment Clause
CRO Container Release Order
CROS Cash Return On Sales
CRP Cost Recovery Price
CRR Cash Reserve Ratio
CRS Cash Recycling System
CRS Congressional Research Service
CRST Coin Roll Storage Till
CSI Capital Structure Irrelevance
CT Converted Transaction
CTA Corporation Tax Assessing
CTC Cost To Company
CTC Current Total Compensation
CTD Cash Taken Deficiency
CTP Corporate Trade Payment
CTR Cash Transfer Report
CTRT Cut Rate
CTS Cash To Spend
CTX Corporate Trade Exchange
CV Complete Valuation
CVA Cash Value Added
CVA Combined Value Auction
CVP Cost Volume Profit
CVV Credit Verification Value
CVV Creditcard Validation Value
CWO Cash With Order
CWO Cheque With Order
DA Duration of Asset
DB Declining Balance
DB Direct Bill
DBA Date Book Archive
DBDP Digits Before the Decimal Point
DCAA Defense Contract Audit Agency
DCAP Discount, Charges, Allowances, and Promotions
DCAS Database Commitment Accounting System
DCCF Discounted Cumulative Cash Flow
DCF Discretionary Cash Flow
DCFPS Discretionary Cash Flow Per Share
DCM Debt And Cash Management
DCOH Days Cash On Hand
DCOT Domestic Corporation Occupation Tax
DD Demand Deposit
DD Demand Draft
DDA Demand Deposit Account
DDB Double Declining Balance
DDD Desired Delivery Date
DEB Debenture
DEL Deletion
DEL Departmental Expenditure Limit
DF Discount Factor
DFAS Defense Finance and Accounting Service
DFC Down From Cost
DID Data Item Description
DIF Data Interchange Format
DIO Days Inventory On-hand
DIR Deposit Item Returned
DIRT Deposit Interest Retention Tax
DISC Domestic International Sales Corporation
DITL Deferred Income Tax Liability
DIV Dividend
DM Debit Margin
DMD Domestic Manufacturing Deduction
DMP Debt Management Plan
DN Debit Note
DNI Distributable Net Income
DNS Database of Names and Salaries
DOD Debt Outstanding Disbursed
DP Down Payment
DPO Days Payable Outstanding
DPO Departmental Purchase Order
DPP Direct Product Profit
DPR Data Production Request
DR Daily Rate
DR Discrepency Report
DRC Departmental Running Costs
DRC Direct Responsible Charge
DRP Debt Reduction Program
DSC Debt Service Coverage
DSC Deferred Sales Charge
DSC Designated Secured Creditor
DSM Direct Sales Margin
DSO Day Sales Outstanding
DSO Days Sales Outstanding
DSRI Days in Sales Receivables Index
DT Debt Total
DTI Debt To Income
DTR Daily Trade Returns
DTS Dock To Stock
DTTN Digital Trade Transport Network
DUS Dollar Unit Sampling
EA Expenditure Authorization
EAA Equivalent Annual Annuity
EAC Estimate At Completion
EAF Employment Administration Fund
EAP Estimated Adjusted Price
EAR Equivalent Annual Rate
EASA Easy Access Savings Account
EAU Estimated Annual Usage
EAY Effective Annual Yield
EBDITA Earnings Before Depreciation, Interest, Taxes, and Amortization (usually seen as EBIDTA)
EBG Emirates Bank Group
EBIDT Earnings Before Interest, Depreciation, and Taxes
EBIT Earnings Before Interest and Taxes
EBITA Earnings Before Interest Taxes And Amortization
EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization
EBITDAR Earnings Before Interest Taxes Depreciation Amortization And Rent
EBPP Electronic Bill Presentment and Payment
EBT Earnings Before Taxes
EBV Economic Book Value
EC Electronic Cash
EC Electronic Commerce
ECB External Commercial Borrowing
ECCO Evaluation Of Capital Creation Options
ECI Employment Cost Index
ECR Efficient Cost Reduction
ECR Electronic Cheque Recovery
ECR Energy Cost Recovery
ECS Electronic Clearing Service
ECTS European Credit Transfer System
EDC Embedded Direct Costs
EDD Electronic Direct Deposit
EDF Expected Default Frequency
EDMAX Educational Management Exchange
EDP Electronic Data Processing
EDPAA EDP Auditors Association
EDPAF EDP Auditors Foundation
EFS Effective Financing Statement
EFS Electronic Fund Systems
EFTPOS Electronic Funds Transfer Point Of Sale
EFTPS Electronic Federal Tax Payment System
EFTS Electronic Funds Transfer System
EIC Earned Income Credit
EIR Effective Interest Rate
EIRF Electronic Interchange Reimbursement Fee
EIRR Economic Internal Rate of Return
EITC Earned Income Tax Credit
ELMI Electronic Money Institution
ELSS Equity Linked Saving Schemes
EM Electronic Money
EMI Equal Monthly Installment
EMI Equated Monthly Instalment
EML Estimated Maximum Loss
EMO Electronic Money Order
EMO Excess Manufacturing Overrun
EMV Electronic Money Value
EMV Expected Monetary Value
ENOD Electronic Notice Of Deposit
EOF Enterprise Object Framework
EOM End Of Month
EP Economic Profit
EP Expensive Price
EPA Equity Principal Additions
EPC Earnings Per Click
EPC External Processing Cost
EPO Electronic Payment Order
EPO Express Payment Option
EPS Electronic Payment System
EQP End Quantity Pricing
ER Explicit Rate
ERA Electronic Remittance Advice
ERA Expected Rate of Advance
ERC Equity Reciprocity And Competition
ERG Emergency Response Group
ERISA Employee Retirement Income Security Act of 1974
ERMA Electronic Recording Machine Accounting
ERR External Rate Of Return
ERTA Economic Recovery Tax Act of 1981
ESCA Electronic Smart Card Account
ESOP Employee Stock Option Plan
ET Earning Threshold
ET Employment Tax
ETA Electronic Transfer Account
ETBYLAW Bylaws of the American Institute of Certified Public Accountants
EV Enterprise Value
EV Exposure Value
EVA Economic Value Added
EVA Express Value Account
EVMS Earned Value Management System
EY Ernst & Young
F Fireproof
F Fiscal
F Foreclosure
FAACS Fixed Asset Accounting and Control System
FAB Finance Advisory Board
FAB Fulfillment Assurance And Billing
FACS Financial Activity Control System
FACTS Fast Automatic Cash Transfer System
FADM Financial Accounting Database Management
FAE Foundation for Accounting Education
FAF Financial Accounting Foundation
FAO For Account Of ....
FARM Financial Analysis For Retail Management
FAS Financial Accounting Standard
FAS Financial Accounting Standards
FASAB Federal Accounting Standards Advisory Board
FASAC Financial Accounting Standards Advisory Committee
FASB Financial Accounting Standards Board
FASBI Financial Accounting Standards Board Interpretations
FASBS Statements of the Financial Accounting Standards Board
FASBT Financial Accounting Standards Board Technical Bulletins
FASC Concepts Statements of the Financial Accounting Standards Board
FBC Foreign Bank Charges
FBO Final Buy Out
FBO For the Benefit Of ....
FBS Finance And Business Services
FBT Fringe Benefit Tax
FBU Finance Bank Utility
FC Finance Charge
FC Financial Capital
FCA Fellow Chartered Accountant
FCE Final Consumption Expenditure
FCF Free Cash Flow
FCPA Foreign Corrupt Practices Act
FDBD Foreign Documentary Bills Discounted
FDC Fees, Deposits, And Credits
FDD Foreign Demand Draft
FDIC Federal Deposit Insurance Corporation
FDR Federal Deposit Reimbursement
FE Fiscal Equalization
FEI Financial Executives Institute
FEITFIS FASB Emerging Issues Task Force Issue Summaries
FEITFM FASB Emerging Issues Task Force Minutes of Meetings
FERF Financial Executives Research Foundation
FFIEC Federal Financial Institutions Examination Council
FFO Funds From Operations
FGAA Federal Government Accountant's Association
FICA Federal Insurance Contributions Act
FID Financial Information Data
FIDO Financial Information Delivered Online
FIND Financial Information Net Directory
FIO Financial Object
FIRE Finance Insurance And Real Estate
FIS Financial Information Strategy
FIS Financial Information System
FIS Free In Store
FL Financial Loss
FMA Financial Management Assessment
FMCG Financial Management for Consumer Goods
FMS Fraud Management System
FMSS Financial Management Software System
FMSS Financial Management Systems Software
FN Fiscal Note
FOB Free On Board
FOC Firm Order Commitment
FOFI Future Oriented Financial Information
FOMC Federal Open Money Committee
FOP Form Of Payment
FP Floating Point
FPA Financial Performance Assessment
FPA Full Page Ad
FR Federal Register
FRB Federal Reserve Bank
FRO From Receipt of Order
FRR Facility Risk Rating
FRR Financial Reporting Releases
FRS Financial Records System
FS Fact Sheet
FS Financial Statement
FSA Federation of Schools of Accountancy
FSA Flexible Spending Arrangement
FSAP Financial Statement Analysis Package
FSAQ Financial Statement Analysis Questionnaire
FSC Foreign Sales Corporation
FSP Flexible Spending Plan
FSR Financial Status Report
FT Fair Trade
FTC Federal Trade Commission
FTD Federal Tax Deposit
FTM Financial Tax Management
FTR Financial Transmission Right
FTT Foreign Telegraphic Transfer
FUTA Federal Unemployment Tax ACT
FV Future Value
FVAN Future Value Annuity
FVF Final Value Fee
FWP Factory Wholesale Price
GAAFR Governmental Accounting, Auditing, and Financial Reporting
GAAS Generally Accepted Auditing Standards
GAF Growing Annuity Factor
GAGAS Generally Accepted Government Auditing Standards
GAM Group Annuity Mortality
GAO General Accounting Office
GAP Guaranteed Asset Protection
GAR General Accounts Receivable
GAS Governmental Accounting Standards
GASB Governmental Accounting Standards Board
GASB-COD Governmental Accounting Standards Board Codification
GASBC Concepts Statements of the Governmental Accounting Standards Board
GASBI Governmental Accounting Standards Board Interpretations
GASBS Statements of the Governmental Accounting Standards Board
GASBT Governmental Accounting Standards Board Technical Bulletins
GB Give Back
GC Gizmo Cost
GCA Global Cash Access
GDP Good Debt Payments
GDS General Depreciation System
GFIA Governmental Financial Institutions and Agencies
GFOA Government Finance Officers Association
GFS General Finance Statistics
GJ General Journal
GLI General Ledger Interface
GLW General Ledger Warehouse
GMAC General Motors Acceptance Corporation
GMS Gross Merchandise Sales
GMV Guaranteed Minimum Value
GOP Gift Of Propriety
GOP Gross Operating Profit
GP Guide Price
GPD Guaranteed Paid Downline
GPE Gravitational Potential Energy
GR Growth Rates
GRM Gross Rent Multiplier
GTB General Transaction Background
GTB Global Transaction Banking
GTL Group Term Life
GTT General Agreement on Tariffs and Trades
GWS Gross Wages and Salaries
HAM Hold A Month
HD High Dollar
HEP Home Equity Prepayment
HFMA Healthcare Financial Management Association
HLBV Hypothetical Liquidation at Book Value
HNAG Historical National Accounting Group
HP Half Paid
HV High Volume
I Interest
IAA Internal Accounting Association
IAD Interest Adjustment Date
IAD Intrest Adjustment Date
IAFP International Association for Financial Planning
IAG International Auditing Guidelines
IAHA International Association of Hospitality Accountants
IAI Independent Accountants International
IAO In the Amount Of
IAPC International Auditing Practices Committee
IBAN International Bank Account Number
IBDA Independent Broker Dealer Association
IBM Internationall Buissnes Machines
IBRD International Bank for Reconstruction and Development
IBS Internet Banking System
IC Internal Control
ICA International Congress of Accountants
ICAA Institute of Chartered Accountants in Australia
ICAP Institute of Chartered Accountants of Pakistan
ICFA Institute of Chartered Financial Analysts
ICFP Institute for Certified Financial Planners
ICM Incentive Compensation Management
ICMA Institute of Certified Management Accountants
ICR Indirect Cost Recovery
ICR International Credit Repair
ICS Issuers Clearinghouse Service
ICSO Internal Control Sarbanes-Oxley
ICST Intra-Company Stock Transfer
ID Identification
IDB Industrial Development Bond
IDC Intangible Drilling Cost
IDC Interest During Construction
IDCR InDirect Cost Recovery
IDCRF InDirect Cost Recovery Funds
IDR Industrial Development Revenue bonds
IF Intelligent Finance
IFPS Interactive Financial Planning System
IFS Industrial and Financial System
IFS Institutional Financing Services
IG Inspector General
IGAF International Group of Accounting Firms
IIA Institute of Internal Auditors
IIN Institution Identification Number
ILC Irrevocable Letter Of Credit
ILOC Irrevocable Letter Of Credit
IM Instant Money
IMA Investment Management Agreement
IMMA Insured Money Market Account
INCFO Institute of Newspaper Controllers and Finance Officers
ING International Netherlands Group
IO Interest Only
IOC Insist On Cash
IOCR Incremental Output Capital Ratio
IOCS In-Office Cost System
IOCX Extended Immediate-Or-Cancel order
IOLTA Interest on Lawyers' Trust Accounts
IOU Is Owed Unto ....
IPC Information Product Cash
IPO Interest Paid On
IPR Internal Purchase Requisition
IPS Interactive Purchasing System
IPS Interim Payment System
IPS Internet Payment Solutions
IPS Internet Payment System
IPS Invoice And Progress Schedule
IPSAS International Public Sector Accounting Standards
IPSP Internet Payment Service Provider
IR Income Ratio
IRA Individual Retirement Account
IRB Internal Ratings Based
IRB Internal Revenue Bulletin
IRC International Reply Coupon
IRC Item Related Check
IRG Interest Rate Guarantee
IRP Intermediary Relending Program
IRS Increasing Returns to Scale
ISA International Standard of Auditing
ISBA Idaho State Board of Accountancy
ISBP International Standard Banking Practice
ISO Incentive Stock Option
ITA Israeli Tax Authority
ITIN Individual Taxpayer Identification Number
ITL Interested Transaction List
IW Instalment Warrant
JC Just Cash
JE Journal Entry
JEEP Joint Ethics Enforcement Plan
JFS Journaled File System
JIB Joint Interest Billing
JMI Jointly Managed Inventory
JN Journal Name
JPAS JITC Project And Accounting System
JRN Journal
JRTC Job Retention Tax Credit
JV Journal Voucher
KDT Cost of Debt before Tax
KDX Cost of Debt after Tax
KIBOR Karachi Inter-Bank Offered Rate
KOA Keep On Adding
KR Key Rate
KVA Knowledge Value Added
L Liabilities
LAE Loss Adjustment Expenses
LAR Legal Amount Recognition
LASER Loans And Savings Earn Rewards
LB Logging And Bookkeeping
LBA Loss Based Adjustment
LC Letter of Credit
LC Loan Commitment
LCM Lower of Cost or Market
LCR Loan To Cost Ratio
LE Limited Expense
LE Line Entry
LES Linear Expenditure System
LESA Lab, Engineering, Sales, & Administration costs
LEXIS Legal Exchange Information Service
LF Ledger Folio
LG Letter of Guarantee
LIFT Local Improvement Finance Trust
LILO Lease In / Lease Out
LIQ Liquid
LLC Low Low Costs
LMV Labor Material Voucher
LO Local Order
LOC Letters Of Comment
LOI List Of Items
LOR Letters Of Response
LP Loan Proceed
LPD Last Purchase Date
LPI Late Payment Interest
LPO Local Purchase Order
LPO Lower Payment Option
LQA Last Quarter Annualized
LR Loan Repayment
LRP Loan Repayment Program
LTF Long Term Financing
LTV Liquidate, Terminate, And Vacate
LTV Loan To Value
LVR Loan To Valuation Ratio
MAAA Member of the American Academy of Actuaries
MACC Market Assessed Cost of Capital
MACOE Mcomulti Agent Common Operating Environment
MACRS Modified Accelerated Cost Recovery System
MADS Maximum Annual Debt Service
MAF Monthly After the Fact
MAM Modern Accountancy Marketing
MAP Management of an Accounting Practice
MAP Minimum Advertised Price
MAS Management Advisory Services
MAS Multi Agent System
MASS Memorandum Account Statement System
MAT Moving Annual Total
MBA Masters of Business Administration
MBAA Mortgage Bankers Association of America
MBO Management By Objective
MBS Multi Bank Standard
MC Marketing Cost
MC Master Card
MC Master Charge (now called MasterCard)
MCA Multifamily Capital Access
MCC Mortgage Credit Certificate
MCP Monthly Capitation Payment
MCS Management Consulting Services
MD Money Deficient
MDC Miscellaneous Debits And Credits
MDE Minimum Distributor Earnings
MDO Minimum Distribution Option
MEA Major Expense Authorization
MER Micro-Economic Reform
MFOA Municipal Finance Officers Association
MFR Maximum Financial Return
MGM Money Growing Money
MGR Monthly Gross Revenue
MIA Merchant Initiated Authorization
MIBOR Mumbai Inter-Bank Offered Rate
MIN Manufacturers Identification Number
MIS Management Information System
MLB Material, Labor, Burden
MLR Minimum Lending Rate
MM Material Management
MMDA Money Market Demand Account
MMRP Minimum Monthly Required Payment
MNA Multi-National Account
MOH Manufacturing OverHead
MPP Monthly Purchase Plan
MPR Minimum Price Required
MPS Masterfile Payment System
MQ Minimum Quantity
MR Management Result
MR Marginal Revenue
MRA Multi-Record Action
MRC Monthly Recurring Charge
MRO Main Refinancing Operation
MRO Maintenance Repair And Operating
MRP Material Requirement Planning
MRP Maximum Retail Price
MS Money Supply
MSBA Michigan State Board of Accountancy
MSC Merchant Service Charge
MSF Manufacturing Science And Finance
MSF Manufacturing Science Finance
MSP Manufacturer's Selling Price
MSV Managing for Shareholder Value
MSV Mortgage Submission Voucher
MTD Month To Date
MTDC Modified Total Direct Costs
MTFP Medium Term Fiscal Plan
MTS Money Transactions System
MUFR Manual for Uniform Financial Reporting
MUM Money Under Management
MVA Market Value Added
NAA National Association of Accountants (Now IMA)
NAAACPA National Association of Asian American Certified Public Accountants
NAAI National Association of Accountants in Insolvencies
NAARS National Automated Accounting Research System
NABA National Association of Black Accountants
NACC National Accounts Classification Committee
NAFC National Accounting and Finance Council
NASBA National Association of State Boards of Accountancy
NASDQ National Association of Securities Dealers Automated Quotations
NB Net Benefit
NBAD National Bank of Abu Dhabi
NBP National Bank of Pakistan
NBR Non Borrowed Reserves
NBT Non Billable Time
NC No Credit
NC Non Collectible
NCCPAP National Conference of Certified Public Accountant Practitioners
NCGA National Council of Governmental Accounting
NCPAG National Certified Public Accountant Group
NCS Net Common Stock
NDI Net Disposable Income
NFE Net Foreign Earnings
NFP Net Factor Payments
NFP Not For Profit
NFV Net Future Value
NFW Net Future Worth
NIBT Net Income Before Tax
NIFO Next In, First Out
NIO Not In Order
NIRS Non-Increasing Returns to Scale
NISS National Information Services and Systems
NLR Net License Revenue
NLR Net Local Revenue
NM Net Margin
NNN Triple Net
NO Normal Output
NOD Notice Of Default
NOF New Opportunity Funds
NOI Net Operating Income
NOL Net Operating Loss
NOLC Net Operating Loss Carryover
NOPAT Net Operating Profit After Taxes
NP Net Profit
NPAT Net Profit After tax
NPC Net Present Cost
NPD National Purchase Diary
NR Net Revenue
NR No Reserve
NRR Normal Rate of Return
NRV Non-Return Valve
NS Non Sale
NSA Not Seasonally Adjusted
NSAA National State Auditors Association
NSAC National Society of Accountants for Cooperatives
NSI Net Sales Income
NSP Net Selling Price
NSP Not Separately Priced
NSV Net Sales Value
NT Non Transactions
NTA Net Tangible Assets
NTF No Transaction Fees
NUI Net Unearned Income
NV No Value
NVD No Value Declared
NYB New York Banks
NYSSCPA New York State Society of Certified Public Accountants
OAC On Approved Credit
OAR Overhead Absorption Rate
OAS Overpayments and Accounting Summary
OBM Open Book Management
OBO Or Best Offer
OCA Open Checking Account
OCC Other Charges and Credits
OCF Operating Cash Flow
OCR Official Cash Rate
OD Overnight Deposits
OE Open Entry
OE Operating Expenses
OEI Outside Equity Interest
OFR Operating and Financial Review
OFX Open Financial Exchange
OHD Overhead
OI Open Interest
OI Operating Income
OJ Official Journal
OLA On-Line Accounting
OLE Old Ledger Extension
OLE On-Line Entry
OLER On-Line Entry Requirements
OLJ On-Line Journal
OMB Office of Management and Budget
OMV Open Market Value
ON Order Number
OOC Out Of Cash
OOE Other Operating Expenses
OOPS Outstanding Overdraft Protection Service
OPB Outstanding Principal Balance
OPEX OPerational EXpenditure
OPI Open Payment Initiative
OR Operating Result
OR Operations Research
OS On Sheet
OSD Overages, Shortages, and Damages
OTB Off Trial Balance
OTR Order To Receipt
OTS One Time Settlement
OTT Over The Top
OWB Over Without Bill
P Price
P Profit
P Projected
P/B Price-To-Book Ratio
PA Pre Approved
PA Public Accountant
PA Public Administration
PAB Professional Auditor Bulletins
PAC Pre-Authorized Cheque
PACA Per Annum Compounded Annually
PAD Pre-authorized Electronic Debit
PAF Payment Approval Form
PAID Production Accounting and Invoicing Database
PAL Passive Activity Loss
PAL Programmatic Adjustment Loan
PAN Personal Account Number
PAP Pre-Authorized Payment
PAR Pre-Authorized Remittance
PAR Public Accounting Report
PARIS Purchasing Accounting Reporting Information System
PAT Profit After Tax
PATA Pacific Association of Tax Administrators
PB Previous Balance
PB Private Bank
PBB Performance Based Budgeting
PBO Projected Benefit Obligation
PBT Profit Before Tax
PC Per Capita
PCA Priority Collection Action
PCF Product Cost Function
PCM Per Calculated Month
PCM Price Cost Margin
PCM Project Cost Model
PCS Price Computing Scale
PCT Primary Care Trusts
PD Partial Deduction
PD Per Diem
PD Probability of Default
PDD Paperless Direct Debit
PDF Payroll Discrepancy Form
PDI Practice Development Institute
PDN Payment Due Notice
PDQ Pallet Deal Quantity
PE Price Earnings
PEG Price/Earnings ratio to Growth
PEP Productivity Efficiency and Profits
PERT Performance Evaluation Reporting Technique
PFC Prepaid Finance Charge
PFP Personal Financial Planning
PFS Personal Financial Specialist
PI Pre-Invoice
PIE Price Implied Expectations
PIF Payment In Full
PIK Payment In Kind
PIL Payment In Lieu
PIL Percentage Increase in Loss
PILOT Payment In Lieu Of Taxes
PIP Penalty Interest Payments
PIP Price Interest Percentage
PIP Purchasing Invoice Problem
PIT Principal Interest and Taxes
PITI Principal Interest Tax and Insurance
PL Plan Loan
PLL Provision for Loan Loss
PLS Profit and Loss Sharing
PLU Price Look Up
PMI Preferred Minimum Interest
PML Probable Maximum Loss
PMS Payment Management System
PMV Presumed Maximum Value
PO Production Order
PO Purchase Order
POB Public Oversight Board
POD Payable On Demand
POI Price and Output Indices
POP Point Of Purchase
POR Pay On Return
POR Payable On Receipt
POR Price On Request
POS Percentage Of Sales
POS Purchase Of Service
PP Pre Paid
PPS Payment Processing Service
PPS Prospective Payment System
PPV Price Per Variance
PPV Purchase Price Variance
PR Price Received
PR Program Revenue
PRC Peer Review Committee
PRD Price Related Differential
PRS Payment Reminder System
PRSA Pension Retirement Savings Accounts
PS Point Source
PS Purchase Sale
PSA Personal Savings Account
PSFI Private Sector Financed Infrastructure
PSNB Public Sector Net Borrowing
PTI Pre-Tax Income
PTIN Preparer Tax Identification Number
PTN Product Transfer Notes
PTO Payment Treatment and Operations
PTP Pre-Tax Profit
PTP Publicly Traded Partnership
PTP Purchase To Pay
PTPD Part Paid
PTPM Pre-Tax Profit Margin
PTPP Pre-Tax Premium Plan
PV Present Value
PV Principle Value
PVA Present Value Analysis
PVCHART Profit-Volume Chart
PVIF Present Value Interest Factor
PVIFA Present Value Interest Factor for Annuities
QAB Quarterly Account Balance
QAI Quality Auditing Institute
QC Quality Control
QC Quantity Comparison
QCIC Quality Control Inquiry Committee
QCP Quality Control Policies and Procedures
QCR Qualifying Collateral Report
QDA Quantity Discount Agreement
QO Quote Order
QOF Quality Of Finance
QOH Quantity On Hand
QP Quantity Purchased
QR Quality Review Program
QTD Quarter To Date
QTD Quoted
QTIP Qualified Terminable Interest Property
QTIP Qualified Terminal Interest Property
QTQ Quarter-To-Quarter
QTR Quarter
R Rate
R Revenue
RA Remuneration and Audit
RA Return Authorization
RAL Rapid Anticipation Loan
RAL Refund Anticipation Loan
RAM Round AMount
RAPS Reimbursement Account Processing System
RB Revenue Book
RBC Risk Based Capital
RC Rate Change
RC Reduced Cost
RCTI Recipient Created Tax Invoice
REAL Revenues Expenses Assets Liabilities
REIT Real Estate Investment Trust
REV Revenue
REW Real Estate Withholding
RFA Recency Frequency and Amount
RFP Request For Proposal
RFV Relative Fair Value
RGP Redemption Grace Period
RI Real Interest
RI Residual Income
RIA Residual Intangible Assets
RIF Registered Investment Plan
RITC Reduced Income Tax Credit
RLF Revolving Loan Fund
RM Retail Margin
RMB Reimburse
RMD Required Minimum Distribution
RMM Retirement Money Management
RMS Receivables Management Service
RMS Receivables Management Solutions
RMU Reticular Module Unit
RNY Required Net Yield
ROA Return On Average
ROC Retail Only Consumer
ROC Return On Capital
ROC Running On Credit
ROD Return On Debt
ROE Rate Of Exchange
ROE Return On Equity
ROEC Return On Economic Capital
ROG Rate Of Growth
ROIA Research Opportunities in Internal Auditing
ROIA Return On Investment Analysis
ROIC Return On Invested Capital
ROII Return On Inventory Investment
ROIT Return On Investment from Technology
ROIV Return On Investment Value
ROIX Return On Investment multiple
ROMI Return On Market Investment
ROP Reciprocity Of Price
ROR Rate Of Return
ROSS Resource Ordering And Status System
RP Regular Price
RP Risk Premium
RPD Repaid
RPD Revenue Processing Division
RPH Rate Per Hour
RPO Rapid Purchase Order
RPPS Remote Payment and Presentment Service
RPS Remittance Processing Service
RR Receiving Record
RRA Revenue Reconciliation Act of 1990
RRB Real Return Bonds
RRB Resource-Related Billing
RRDA Repetitive Record Distribution Audit
RRI Risk Return Index
RRM Realty Rate Monitor
RRR Required Reserve Ratio
RSPA Research Sponsored Programs Accounting
RT Routing and Transit number
RTD Revenue Transmittal Document
RTGS Real Time Gross Settlement
RTPP Real-Time Payments Processing
RTPS Real-Time Payment System
RTV Return To Vendor
RV ReValuation
SAAR Seasonally Adjusted Annualized Rate
SAARS Standard Accounting And Review Standards
SAB Staff Accounting Bulletins
SAC Same As Cash
SACS Standardized Account Code Structure
SAFE Secure Automated Financial Exchange
SAFR Standard Accounting For Retail
SAICA South African Institute of Chartered Accountants
SAL Structural Adjustment Loan
SALY Same As Last Year
SAP Service Advertisement Protocol
SAP Standard Accounting Procedures
SAP Systems Applications Products
SAPG Sector Accounting Policies Group
SAR Salvation And Revival
SAS Semi Annual Statement
SAS Statistical Analysis System
SBA Small Business Administration
SBPOA Shared Services and Business Process Outsourcing Association
SBT Scan Based Trading
SCON Scheme Contracted Out Number
SCR Stranded Costs Recovered
SCRR Special Cash Reserve Requirement
SDB Safe Deposit Box
SDU State Disbursement Unit
SDX Secure Document eXchange
SEC Securities and Exchange Commission
SECPS Securities and Exchange Commission Practice Section
SEDA Standby Equity Distribution Agreement
SEPP Simplified Employee Pension Plan
SERP Supplemental Employee Retirement Plan
SET Secure Electronic Transaction
SF Structural Funds
SF Surcharge Free
SFAC Statements Of Fiscal Accounting Concepts
SFAS Statement Of Financial Accounting Standards
SFE Sales Force Effectiveness
SFS Shared Financial System
SGA Sales General and Administrative
SGA Selling, General, and Administrative
SGL Subsidiary General Ledger
SGM Standard Gross Margin
SIA Society of Insurance Accountants
SIAS Statements on Internal Auditing Standards
SIP Sales Inventory Purchase
SIR Statistical Inventory Reconciliation
SKR Safekeeping Receipts
SLAM Super Low Administrative Mortgage
SLC Sight Letter of Credit
SLR Statutory Liquidity Ratio
SMA Separately Managed Account
SMA Special Memorandum Account
SMART Systematic Mortgage Amortization Reduction Technology
SMAS Statements of Standards for Management Advisory Services
SNBG State Network on Block Grants
SNC Shared National Credits
SOA Statement Of Activity
SODA Standing Order Deposit Account
SOE Start Of Entry
SOFA Statement Of Financial Activities
SOHO Small Office/ Home Office
SOI Schedule Of Investment
SOP Sale Of Purchase
SOP Statements Of Position
SOS Start Out Savings
SPAN School Property Account Number
SPAR Special Pricing Agreements And Rebates
SPD State Price Density
SPF Sale Pending Funds
SPFV Series Payment Future Value
SPI Store Payment Interface
SPN Secure Payment Network
SPOF Supply Price Of Finance
SPOT Secure Payment for Online Transactions
SPP Simple Payback Period
SPQR Small Profit Quick Return
SPRV Special Purpose Reinsurance Vehicle
SQ Standard Quantity
SRAC Short Run Average Cost
SRLY Separate Return Limitation Year
SRM Summary Review Memorandum
SRMC Short Run Marginal Cost
SRPI Self Report and Projective Inventory
SS Sum of Sales
SSA Special Savings Account
SSAE Statements on Standards for Attestation Engagements
SSAP Statement of Statatory Accounting Principal
SSARS SS Accounting and Review Services
SSARSI SS Accounting and Review Interpretations
SSASPFI SS Accountants' Services on Prospective Financial Information
SSN Sales Sequenced Number
ST Sub Total
STBF Subject To Booking Fee
STBP Short Term Business Payment
STI Short Term Incentive
STL Short Term Loan
STRIP Separately Traded Residual and Interest Payments
SUQ Standard Update Quantity
SUTA State Unemployment Tax Act
SV Sales Volume
SYD Sum-of-the-Years'- Digits
T Total
T/T Telegraphic Transfer
TAA Trade Adjustment Assistance
TAB Tax Anticipation Bill
TABS Telephone Account Billing System
TAC Targeted Amortization Class
TAC Total Average Cost
TAF Term Auction Facility
TAMRA Technical and Miscellaneous Revenue Act of 1998
TAS The Accounting Solution
TBL Triple Bottom Line
TBO Total Bookkeeping Operations
TBR Total Business Return
TC Total Cost
TCAN Tax Credit Award Notice
TCE Tax Counseling of the Elderly
TCO Take Cost Out
TCO Total Cost Of Ownership
TD Tabular Data
TDR Total Debt Restructuring
TDS Tax Deduction at Source
TDS Total Debt Service
TE Total Expenditure
TE Total Expenses
TEC Total Employment Cost
TEC Total End Cost
TEFRA Tax Equity and Fiscal Responsibility Act of 1982
TEL Tax Expenditure Limitation
TFM Total Financial Management
TFSA Tax-Free Savings Account
TGR Total Gross Receipts
TI Transcribe In
TIC Technical Issues Committee
TIC Total Input Costs
TIC True Interest Cost
TIF Tax Increment Financing
TIFA Tax Increment Financing Authority
TIGER Technology Industry And Government For E Revolution
TIS Transaction Information System
TITC Technology Investment Tax Credit Program
TJ Transposed Journals
TLC Too Little Cash
TLC Too Little Credit
TMA Tax on Management Account
TMP Tax Matters Partner
TNW Total Net Worth
TOA Total Operating Assets
TOD Transfer On Death
TP Transfer Pricing
TPR Total Price Reduction
TPT Tax on Prior Transfers
TR Total Revenue
TR Trust Receipt
TRAC Transactional Records Access Clearinghouse
TRC Total Resource Cost
TRX Transaction
TS Total Surplus
TSC Transaction Service Charge
TSC True Stranded Costs
TSTE Two Stage Transaction Execution
TTM Trailing Twelve Months
TTP Time To Pay
TV Transfer Voucher
TVC Total Variable Costs
TVM Time Value of Money
TVT Time Value Tangibles
TXN Transaction
TXP Tax Payment
TXR Tax Supplemental Return
UCC Unconfirmed Credit Contract
UCC Uniform Commercial Code
UCR Un-Classified Receipts
UCR Usable Capital Receipts
UDI User Defined Invoicing
UEC Union Europeene des Experts Comptables Economiques et Financiers
UNI Undistributed Net Income
UOI Unit Of Inquiry
UPB Unamortized Principle Balance
UPIC Universal Payment Identification Code
UPL Upper Payment Limit
UPRICE Unit Price
URN Unique Reference Number
USFV Uniform Series Future Value
USPV Uniform Series Present Value
USTC United States Tax Court
UTA Under Trust Agreement
UTD Up To Date
UVX Universal Value eXchange
VAA Value Added Auditing
VAN Value Added Note
VAP Visa Authenticated Payments
VBV Verified by Visa
VC Variable Costs
VCF Venture Capital Financing
VCM Variable Contribution Margin
VCT Volatile Capital Tax
VFM Value For Money
VIF Variance Inflation Factor
VJI View Journal Invoice
VLI Very Low Inflation
VMP Value of Marginal Product
VMS Voucher Management System
VOD Verification Of Deposit
VOM Value Of Money
VPF Vice President, Finance
VRM Variable Rate Mortgage
VSDC Visa Smart Debit Card
VSP Very Secure Payment
VTS Virtual Transaction Systems
WAA Washington Association of Accountants
WAC With Approved Credit
WACC Weighted Average Cost Of Capital
WACC Weighted Average Costs Of Capital
WACR Weighted Average Certificate Rate
WADR Weighted Average Deposit Rate
WAV With Added Value
WBLS Web-Based Loan Summary Sheet
WCAH World Congress of Accounting Historians
WCAR Western Canadian Auditing Roundtable
WCFG Working Capital For Growth
WCFI World Class Financial Infrastructure
WCFN Working Capital Financing Needs
WCFO Working Capital Fund Operations
WCV Weighted Collateral Value
WDDA Wholesale Demand Deposit Account
WDV Written Down Value
WFFP Web Funds Financial Processing
WGA Whole of Government Accounts
WI With Interest
WI Working Investment
WIN Work Incentive Credit
WKL Weekly Rate
WMER Wholesale Management And Efficiency Report
WNQ Will Not Quote
WO Write Off
WRCC Western Region Credit Conference
WRIS Wage Record Interchange System
WSP WholeSale Price
WSQ Will Send Quote
WSV Wholesale Sales Volume
WSV Wholesale Value
WUAA Washington University Accounting Association
WUMT Western Union Money Transfer
XH Extra High
XP eXtra Profit
XTF Xpress Tax Forms
YC Year Corrected
YLD Yield
YOY Year On Year
YTY Year to Year
ZB Zero Balance
ZBA Zero Balance Account
ZIRP Zero Interest Rate Policy
ZQ Zero Quantity

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