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Accounts
Short Definitions
1. Line of Credit: Availability of loan from
the source in a continuous way.
2. Bonus Shares: Free shares issued by
the company to the existing shareholders.
3. Capitalization of revenue: Revenue
used as source of capital.
4. Solvency: Ability of corporation to meet
its debts at the time of maturity.
5. Kinds of Bond: Serial Bonds,
Registered Bonds, Coupon Bonds,
Convertible Bonds.
6. Contingent Liability: A liability which
may or may not arise on the happening of
unexpected events.
7. Interim Dividend is paid: The
Company pays the dividend at any time
before the annual dividend.
8. Internal Control: A system in which
every activity is controls by itself through a
particular procedure.
9. Concept of Financial Reporting: The
report submitted to the directors &
shareholder about the income statement &
balance sheet.
10. Minority Interest: Share portion of
ownership of subsidiary company
presented in the balance sheet of holding
company.
11. Calculation of goodwill methods:
Net Profit Basis, Super Profit Method,
Capitalization of revenue method.
12. Inventory Shrinkage: Reduction in
the value of inventory due to Theft, Fire, &
Pilferage.
13. Contra Asset Account:
Corresponding account of any account
presented in the Balance Sheet or in
Income Statement.
14. Calculation of Inventory turnover:
To know that how many times the
inventory converted into sale during
physical year.
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operations.
71. Joint Products: products
manufactured simultaneously by a
common process.
72. by products: products of little value
produced during manufacturing the
primary products.
73. Completed Contract Basis: Revenue
is not realized until a sale is completed,
revenue emerges from sale not
production.
74. Retail inventory Method: in this
method, records of goods place in stock
are maintained in terms of costs and also
market retail price.
75. Original Retail: the established sale
price including original increase over cost
variously referred to as mark on or initial
mark up.
76. Additional Markups: Increase that
raise sales price above original retail.
77. Markup Cancellations: Decrease in
additional markups that do not reduce sale
price below original retail.
78. Markdowns: decrease that reduces
sales price below original retail.
79. Markdown Cancellations: Decrease
in the markdowns that do not raise the
sales price above original retail.
80. Retail life: it requires index numbers
be applied to inventories stated at retail in
assigning at the quantitative changes in
inventories.