IBPS Banking Awareness

8/14/2019 IBPS Banking Awareness

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Finance Terminology - List of Financial Terms with examples

A

AGM- Annual General Meeting, it is the year meeting held by every registered company.

Agenda is to explain the performance during the year, presentation of annual financialstatements, voting on important financial decisions. Any shareholder can participate in AGM.

Asset turnover ratio- This ratio can be explained as Net assets / Total turnover or sales. Thisratio measures the operational efficiency of business assets. In simple terms this measures howmany time total assets turned in a year and how efficiently the assets are used in a business.

Acid test ratio- This is one of the important ratio to measure business liquidity. Businessliquidity is defined as ability of a business to pay it;s short term debts. Acid test ratio = Highlyliquid assets / current liabilities

American Depository Receipts- This is the way non-US companies raises money from USinvestors. These shares can be traded in US stock exchanges and denominated in US $.

Amortization - It is an accounting technique by which intangible assets are written off over aperiod of time. For example provision for doubtful debts or preliminary expenses are written offover a certain period of time.

Annuity- It is an investment scheme under which investor makes recurring investments andlump sum payment is made to him at the end. Common example is Recurring deposit account ata post office where people makes small monthly deposits and gets their money back at the end ofperiod. Benefit of Annuity is investor gets compound interest over a period of time.

Asset Management Company- AMC is a company that pools and invests investor money inpre-determined goals. Pool of funds is known as Mutual fund.

Audit- Financial statement and physical stock is checked annually by professional auditor (Chartered Accountant affiliated by ICAI in India )

B

Book-keeping - Recording of financial transactions in books of account.

Bear market - A market situation in which most of the investors thinks that markets will fall.

Balance of Payment - BOP is the difference between a country's exports and imports.

C


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Capital - Wealth invested by an entrepreneur on his business. Capital = Assets - Liabilities

Capital gain - Gain by selling a capital asset in which a person is not doing business. Income byselling a house by a bank employee is a capital gain whereas when a builder do the same thing itis Income from business and professional.

Current asset- An asset that can be converted into cash with 12 months. For example - debtors,stock etc.

Credit rating - A ranking applied to an individual, business or a nation based upon its credithistory and current financial position. There are various credit rating companies in India such asCrisil.

CPI- Consumer price index is measure to find price of a bundle of commodities. CPI is used tomeasure the inflation in a country.

D

Debt consolidation - Debt consolidation is a process by which various loans and converted intoa single loan to reduce interest rate and instalment value.

Depreciation - Depreciation is reduction in value of an asset due wear and tear over a period oftime. For example a company purchased a machine in 2005 and planned to charge 20%depreciation. In 2010 the machine will be written off from the books of account.

Dividend - Dividend is the amount per share paid by a company to its shareholders. Dividend

value is based upon company's profitability.

Dividend payout ratio - It is the ratio of dividend paid per share and EPS ( Earning per share )Double entry bookkeeping - It is a method of bookkeeping in which every transaction isrecorded two accounts. Once in debit side and once in credit side.

E

Earning per share - Earnings made by a company in a financial year divided by number ofissued shares.

Equity - Value of a business. Equity = Total assets - Total liabilities

Ex-divided - Ex-dividend means without dividend. When a seller makes a ex-dividend salescontract then he is entitled to get dividend or interest payment.

EBIT - Earning before interest and taxes


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EBT - Earning before tax

EAT - Earning after tax

F

Face value - The amount mentioned on face of a bond certificate.

Fixed assets - Assets which can be seen such as machinery

Financial year - A period of 12 months from 1st April to 31st march

Fundamental analysis - Analysis of a company based upon financial and operationalperformance.

Fiscal policy - Income and expenses management by Government.

Flat rate - Rate of interest in a contract which remains same irrespective of market rate in future.

Floating rate - Rate of interest which changes with change in market rate.

Fund manager - A person who manages a mutual fund and tries to maximize fund's returnswhile sticking to fund's objectives.

G

Gearing- It is the ratio of debt to equity

Goodwill- Intangible assets that defines firm's reputation in monetary terms.

Gross profit= Net sales - Net purchases - Direct expenses

GDP- Gross domestic product is the aggregate value of goods and services produced by everyperson of a nation.

GST- Goods and services tax is the same tax system for everything. It is proposed that GST will

replace the multi tax system in India by 2015.

H

Hedging - Hedging is a technique used by investors to protect themselves from adverse pricemovements. Derivatives are used for hedging in which hedgers takes the risk of pricefluctuations.


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Hedge funds - Mutual funds which invests in derivatives

I

Index - It is statistical measure used to find price variations in market. In stockmarkets most dominating stocks are grouped to make an index. For example - Sensex.

Income statementA statement that represents both income and expenditure of a business during aspecific period of time.

IPO - Initial public offer is issue of stocks for the first time in the market.

Intangible assets

Assetswhich cant be seen but have value for business. ForexampleGoodwill.

IndemnityA legal contract under which one party promises to pay another for anyloses incurred to them by their acts.

Interest rate risk Risk that value of financial assets will deteriorate because of fallin interest rate. For example value of bonds decreases with decrease in interest rate.

Irredeemable stocksStocks which cant be exchanged for cash in future.

Indirect Costs - Indirect cost is a cost incurred on product that is not directly relatedto its production.

J

Junk fundA fund which invests investors money in junk investments means high

risk investments which high returns.

K

KYCKnow Your Customer policy is mandatory in India and every investorirrespective of his investment volume needs to furnish his identity and residencedetails.


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L

Libor

London

LiquidityAbility of a business to pay off its short term debts with current assets.Currently NISL is facing liquidity crunch.

Liquid assetsAssets which can be readily converted into cash

Liquid ratioLiquid assets/Current liabilities

Limited liabilityLiability of an individual or a business up to the value of

investment made in a business

M

Monopoly - A situation in market where there are many buyers but a single seller exist.

Money market - Market dealing in short term lending and borrowing of funds. Also know as

Cash market.

Monetary policy - Set of actions by Central bank of a country ( RBI in case of India) to controlthe supply of money. These actions included increase in interest rate, open market purchases,changing commercial bank's reserve funds ratio (SLR) etc.

Marginal cost - Additional cost to produce an extra unit of product.

Margin - Amount of profit added to cost price of each unit of a product

Margin call - Margin call term is used in two situations. First- Whenever a lender gives asecured loan and loan value is a fixed percentage of loan then whenever the value of securitydecrease below the decided ratio then lender given a margin call to borrower to bring loan tosecurity ratio to decided level. Secondlyin stock exchanges traders trades in various securities


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by paying 20-30% of the value of securities. Whenever the value of security goes below thatmargin, broker gives margin call to trader to bring the margin to desired level.

Mark-to-market- As explained above while defining margin call, value of assets in case of

securities is measured on daily basis. If the trader's asset value increased, increased value istransferred to his account. In case the value of assets decreased margin call is made to adjust themargin.

N

NPV -Net Present Value is aggregate of future cash flows from a project minus total costs. NPVis a capital budgeting technique used to check feasibility of projects.

Net profit -Net profit is Gross profit minus indirect cost. See indirect costs

Net worth -Net assets - Total liabilities

Nationalization - When Government takes control of a business, this is known asnationalization.

NAV -Net Assets Value is mutual fund's per unit exchange traded price

O

Opportunity cost - Additional cost in production of an addition unit of product.

Options - Option is right to buy at pre-determined price at a future date. Option is used forhedging. Options safeguards option-holder from future price fluctuations.

Overdraft - Facility given by a bank which allows its customers to withdraw more money thanaccount balance. Overdraft generally have high rate of interest as borrower can demand andreturn the loan anytime.

P


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Preference shares - A type of shares having no voting rights and have higher rate of dividend.

Ponzi schemes - It is a kind of fraud scheme which use Network marketing as a tool. Investorsare paid out of new investments. These schemes end when new investments stop coming and

large number of investors wants to withdraw their money. Latest Ponzi scheme in India was"Speak Asia".

PLR - Prime lending rate is the minimum rate of interest that is to be charged by a bank. Eachbank decides its own PLR.

R

ROI - Rate on investment is return divided by value of investment

Redemption - Maturity date of a security or a bond

Recession - An economic situation of negative growth

Repo rate- Rate at which Central bank (RBI in case of India) lends money to commercial banks

Reverse repo rate- Rate at which commercial banks lends to central bank

Right issue - Issue of shares in which existing shareholders gets right to buy shares in proportion

of their existing holding

Risk free return - Rate of return, normally it is 90 days bills issued by a national government

S

Stagnation - An economic situation of slow economic growth, high rate unemployment andinflation.

Shorting - Selling securities which an investors don't have in expectation of price drop

U


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Underwriters - In case of an IPO, new companies makes contracts with underwriter whereunderwriters promises to purchase unsubscribe shares.

W

Working capital - Money required by a business to run its day to day business. Working capital= Current assets / Current liabilities

Warrants - A document which gives right to holder to get shares at stated price

Y

Yield - Yield is the return on investment which may in form dividend or interest

Banking Terminology

ADR- American Depository ReceiptAGM- Annual General MeetingAIRCSC- All India Rural Credit Survey CommitteeAFS- Available For Sale

ASSOCHAM - Associated Chambers of Commerce and Industry of IndiaATM- Automated Teller MachineBIS- Bank for International Settlements

BoP- Balance of PaymentsCAD- Capital Account DeficitCAG -Controller and Auditor General of IndiaCAMELS- Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Systems &ControlsCBS- Consolidated Banking Statistics

CC- Cash CreditCD- Certificate of DepositCF- Company FinanceCII- Confederation of Indian IndustriesCP- Commercial PaperCPI- Consumer Price IndexCR- Capital ReceiptsCRR- Cash Reserve Ratio


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CSIR- Council of Scientific and Industrial ResearchCSO- Central Statistical OrganisationDBOD- Department of Banking Operations and DevelopmentDBS- Department of Banking Supervision, RBIDCA- Department of Company Affairs,

DCCB- District Central Cooperative BankDCM- Department of Currency Management, RBIDD- Demand DraftDDS- Data Dissemination StandardsDICGC- Deposit Insurance and Credit Guarantee Corporation of IndiaECGC- Export Credit and Guarantee CorporationECS- Electronic Clearing SchemeEEA- Exchange Equalization AccountEPF- Employees Provident FundFDI- Foreign Direct InvestmentFEMA- Foreign Exchange Management Act

FICCI- Federation of Indian Chambers of Commerce and IndustryFII- Foreign Institutional InvestorFPI- Foreign Portfolio InvestmentGDP- Gross Domestic ProductGDR- Global Depository ReceiptGFD- Gross Fiscal DeficitGIC- General Insurance CorporationGPD- Gross Primary DeficitHDFC- Housing Development Finance CorporationHFT- Held For TradingIBS- International Banking StatisticsICAR- Indian Council of Agricultural ResearchICICI- Industrial Credit and Investment Corporation of IndiaICMR- Indian Council of Medical ResearchIDBI- Industrial Development Bank of IndiaIFC- International Finance CorporationIFCI- Industrial Finance Corporation of IndiaIIP- Index of Industrial ProductionIMF- International Monetary FundIRBI- Industrial Reconstruction Bank of IndiaISDA- International Swaps and Derivative AssociationISIC- International Standard Industrial ClassificationISO- International Standards OrganizationLBS- Locational Banking StatisticsLERMS- Liberalised Exchange Rate Management SystemLIC- Life Insurance Corporation of IndiaMCA- Ministry of Company AffairsMIS- Management Information SystemMMSE- Minimum Mean Squared ErrorsNABARD- National Bank for Agriculture and Rural Development


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NASSCOM- National Association of Software and Services CompaniesNBC- Non-Banking CompaniesNBFC- Non Banking Financial CompaniesNEER- Nominal Effective Exchange RateNFA- Non-Foreign Exchange Assets

NGO- Non-Governmental OrganizationNHB- National Housing BankNPA- Non-Performing AssetsNSC- National Statistical CommissionNSSF- National Small Savings FundOD- Over DraftODA- Official Development AssistanceOMO- Open Market OperationsPACS- Primary Agriculture Credit SocietiesPDAI- Primary Dealers Association of IndiaPDO- Public Debt Office

PIO- Persons of Indian OriginPO- Principal OfficePRB- Primary Revenue BalancePSE- Public Sector EnterprisesPUC- Paid Up CapitalRD- Revenue DeficitRDBMS- Relational Database Management SystemRE- Revenue ExpenditureREC- Rural Electrification CorporationREER- Real Effective Exchange RateRIDF- Rural Infrastructure Development FundRoC- Registrars of CompaniesRR- Revenue ReceiptsRRB- Regional Rural BankRTP- Reserve Tranche PositionRWA- Risk Weighted AssetSAS- Statistical Analysis SystemSCARDB- State Cooperative Agriculture and Rural Development BankSCB- State Cooperative BankSCB- Scheduled Commercial BankSDDS-Special Data Dissemination StandardsSDR- Special Drawing RightSEBI- Securities and Exchange Board of IndiaSIFI- Systemically Important Financial IntermediariesSEBs- State Electricity BoardsSGSY- Swarnajayanthi Gram Swarrojgar YojanaSHGs- Self-Help GroupsSIDBI- Small Industries Development Bank of IndiaSIDC- State Industrial Development CorporationSJSRY- Swarna Jayanti Shahari Rojgar Yojana


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SLR- Statutory Liquidity RatioSMG- Standing Monitoring GroupSNA- System of National AccountsSRWTO- Small road & Water Transport OperatorsSSI- Small-Scale Industries

STRIPS- Separate Trading for Registered Interest and Principal of SecuritiesTB- Treasury BillsTC- Temporary ChangeTT- Telegraphic TransferTFTS - Trade for Trade SettlementUCB- Urban Cooperative BankUCN- Uniform Code NumberUNDP- United Nations Developement ProgrammeUNICO- Umbrella Organisation for Large Cooperative Banks in EuropeUNDP- United Nations Development ProgrammeUNIDO- United Nations Industrial Development Organisation

UNME- Urban Non-Manual EmployeesUTI- Unit Trust of IndiaVC- Venture CapitalWPI- Wholesale Price IndexWTO- World Trade Organisation

Y-o-Y- Year-on-YearYTM- Yield to MaturityZTC- Zonal Training Centre

Sports Terminology

Athletics

baton, bell lap, decathlon, discus, false start, field, foul, hammer, heptathlon,high jump, hurdles, javelin, lane, lap, long jump, marathon, middle-distance,pole-vault, relay, record, shot put, sprint, starting blocks, steeplechase, track,track and field, triple jump, Cross Country, etc.

Badminton

Alley, Back Alley, Backcourt, Balk, Baseline, Carry, Center or Base Position,Center Line, Clear, Court, Drive, Drop, Fault, Feint, Flick, Forecourt, HairpinNet Shot, Halfcourt Shot, Kill, Let, Long Service Line, Match, Midcourt, Net

Shot, Push Shot, Racquet, Rally, Serve, Service Court, Short Service Line,Shuttlecock, Smash, Wood Shot etc.

Baseball Pinching, Home run, Base runner, Throw, Perfect game, Strike, Put out, etc.


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BilliardsCue, cannon, baulk, pot scratch, long jenny, short jenny, frame, spider, shortand long rest, in-off, etc.

Boxing

Accidental Butt, Bleeder, Bolo Punch, Bout, Brawler, Break, Buckle, Canvas,Card, Caught Cold, Clinch, Corkscrew Punch, Cornerman, Counterpunch,

Cross, Cutman, Dive, Eight Count, Glass Jaw, Haymaker, Kidney Punch LiverShot, Low Blow, Mauler, Neutral Corner, Plodder, Ring G eneralship,Roughhousing, Southpaw, Spar, Stablemate, Technical Knockout, WalkoutBout, Whiskers etc.

Bridge

Contract bridge, duplicate bridge, tricks, suite , rubber, trump, grand slam, littleslam, etc.

Billiards &

Snooker Pull, Cue, Hit, Object ball, Break shot, Scoring, Cushion billiards, etc., etc.

BoxingKnock. out, Round, Ring Stoppage, Punch, Upper-cut, Kidney punch, Timing, Footwork, etc.

Chess Gambit, stalemate, move, resign, checkmate,etc.

Cricket

Hat-trick, maiden, follow-on, declare, bowled, caught, run-out, leg beforewicket(LBW), stumped, striker, slips, gully, short leg, silly, mid-on, point,cover, mid-off, bouncer, beamer, googly, full toss, drive, cut, pull, hook, flick,etc.

Cycling Sprint, Time trial, Point race, Trackrace, etc.

Football

Attacker, Back Heel, Back Pass, Ball Carrier, Bending the Ball, Bicycle Kick,Center Spot, Corner Flag, Corner Kick, Cross, Defender, Direct Free Kick,Dribble, Far Post, FIFA, Futsal, Give and Go, Goal Line, Goal Mouth,Goalkeeper, Header, Indirect Free Kick, Inswinger, Kickoff, Man to ManMarking, Midfielder, Nearpost, Obstruction, Offside Trap,Offside, One-TouchPass, Penalty Spot, Red Card, Striker, Sweepe, Tackle, Volley etc.

Golf

ace, albatross, double eagle, all square, approach putt, apron, ball mark,ballooning, beach, birdie, blind shot, bogey, bunker, caddy, chip, Claw grip,condor, dogleg, dub, flag, Four-Ball, Mulligan, off the deck, peg, sand trap, teeshot etc.

Gymnastics

Aerial, Back Handspring, Back Somersault, Double Back, Double Twist, Flyaway,Front Hip Pullover, Front Pike Somersault, Front Split, Front Walkover, Gienger,Handstand, Hip Circle, Miller, Pike, Rudi, Straddle, Swedish Fall, Tsukahara,Tuck, Whip Back etc.


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Hockey

Centre, defender, forward, half, penalty-stroke, penalty corner, push-in, free-hit, striking circle goal, goal-line, touch-line, goal keeper, off-side, foul, stick,carry, dribble, tiebreaker, trapping, etc.

Horse

Racing Race course, steeplechase, bets, bookies, jockey, punter, etc.

Judo Cocoa, Blue, white, Green belt, etc.

Polo Mallet, bunker, chukker, handicap, goal, sixty yarder, etc.

Shooting Bag, bulls eye, marksmanship, plug, skeet, etc.

Swimming

Add Up, Anchor, Approved Meet, Backstroke, Banner, Beep, Bonus Heat, Bottom,Breaststroke, Bull Pen, Bulletin, Cap, Car pool, Cards, Check-In, Check-Out,Course, Dryland, False Start, Freestyle, Gun Lap, Heats, Jump, Lane Lines, Paddle,Parka, Pool, Pull Buoy, Relays, Split, Stroke, Yardage etc.

Table

Tennis

Backhand, Backspin, Block, Chop, Closed, Dead ball, Doubles, Drive, Dropshot, Expedite rule, Forehand, Inverted, Let, Lob, Long pips, Loop, Match,Medium-long, Open, Penhold, Pips-in, Pips-out, Push, Receive, Seemiller,Serve, Set, Shakehands, Short, Sidespin, Skunk, Smash, Topspin etc.

Tennis

smash, cross-court, passing shot,backhand, forehand,slice, top-spin,serve,dropshot, lob, down-the-line, deuce, tie-breaker, set, game, grand slam, ace,volley, etc.

Volleyball

Assist, Attack, Attack line, Back row attack, Block, Block assist, Campfire

defense, Carry, Center line violation, Chester, Coach kill, Cover the hitter, Cutshot, Deep dish, Dig, Facial, Fish, Floater, Friendly fire, Free ball, Heat,Husband-and-wife-play, Jedi defense, Joust, Jump serve, Kill, Kong, Line shot,Lollipop, Mintonette, Monument valley, Net violation, Paint brush, Pancake,Pepper, Prince/Princess of whales, Quick set, Rainbow, Red card, Redwood,Roof, Screening, Service ace, Set, Shank, Side out, Six-pack, Sizzle the pits,Spike, Strong side, Stuff, Tandem, Tip, Tool, Trap set, Tuna, Whale, Yellowcard etc.

Weight

Lifting

Bulking, bitch tits, shredded, Six pack, Feeling the Burn, Power Rack, SmithMachine, Muscle Memory, Pump and Toners, Cardio Bunny, Plateau, Vascularity,Supersets, Drop Sets/Strip Sets, Periodization, Pyramiding, Standard Plates andBars etc.

Wrestling Free style, Hal Nelson, Point, Heave, etc.

Basic accounting terms


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comes should be recognized at the time when they are actually realized.

Amortization- It is the splitting off a loan or intangible assets over a future period

Annual report- Report issued by a company at the end of year containing all important financial

statements and preview of management's goals.

Authorized share capital- Maximum share capital a company is authorized to issue

B

Bad debts- Noncollectable receivables

Balance sheet- Statement that summarizes assets and liabilities of a business entity

Bankruptcy- A state in which an individual or legal entity is unable to pay off his debts so he surrenders

his assets to the court.

Bill of exchange- A promise to certain amount of money to holder at a specified date

Bill of lading: A document which represents ownership of goods in transit i.e. goods during shipping

from one place to another.

Bills Payable : A bill which shows that a firm has to pay money to the person or firm whose name is

mentioned in the bill.

Bills receivable : A bill which shows that money is to be paid to firm from those whose names arementioned in the bill.

Bonus shares: Shares which are issued to the existing shareholder w

Bookkeeping : This process includes analyzing, classifying and recording from various sets of books in a

very systematic way.

Book value: Historical cost less accumulated depreciation. Generally, it is accounting value.

Brought down : Written as b/d. It represents the opening balance of an account.

Brought forward: Written as b/f. This term is generally used to open an account for the current year by

posting the closing balance of previous year.

C


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Capital expenditure : Cost incurred to acquire fixed assets which spreads benefits in future.

Capital work-in-progress : Cost incurred in those assets which are not ready yet for use.

Carried down: Written as c/d. This term a synonym for the term carried forward and used to balance an

account.

Carried forward :Written as c/f. Term used to transfer the balance from one period to the another.

Carriage inwards: These are the expenses incurred for transporting the goods purchased by the firm.

Carriage outwards : Expenses incurred for transporting goods sold by the firm.

Cash: It broadly covers currency and generally accepted equivalents of cash, like cheques, drafts and

demand deposits in bank.

Cash at bank : Deposit with bank.

Cash Book : A book of all transactions or entries for cash payments and receipts.

Cash on hand : Cash available and undeposited.

Closing stock/ Closing inventory : Goods remaining at the end of an accounting period.

Conservatism principle: Accounting concept that states that all expected losses should be recorded but

not expected gains.

D

Depreciation: Decrease in value of assets or the cost of an asset is allocated to that period during which

asset is used.

Discount : A deduction from cost of something , offered by seller.

Dividend: A share of profit which is to be distributed to the shareholders.

Dividend Yield: Ratio of current dividend to the current market price of a share.

Double-entry: Transaction entered in both sides debit as well as credit i.e. every transaction has to

entered twice.

Doubtful debts : A collection of that debt which is doubtful.


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Drawings : Withdrawing cash or goods from business for personal use.

Dual Aspect Principle : Also known as Duality Principle. This fundamental principle of accounting

states that every transaction has a dual effect and should be recorded at two places.

Du-Pont System: The System merges the income statement and balance sheet into two measures ofprofitability: Return on Assets (ROA) and Return on Equity (ROE).

EBIT: Earnings before interest and tax.

Entity Principle : The business firm is treated as a separate entity for the purpose of accounting.

Equity: A stock or any other security representing an ownership interest.

Exchange Rate : The rate at which one currency can be converted into another.

Expenses : the cost i.e. material or services used in an operation during a specified period.

F

Face Value: Commonly referred to the amount paid to a bondholder at the maturity date, given that

the issuer doesn't default.

Financial Asset : An intangible asset that derives value. Stocks, bonds, bank deposits etc are all examples

of financial asset.

Financial Ratio : Ratio based on firm's financial statement which reflects firm's financial condition andperformance.

Financial Statement: A formal record of the financial activities of a business, person or other entity.

Financial data is presented in a structured manner.

Fixed Assets : It includes premises, plant and machinery, furniture, land and buildings etc.

Fixed Charge: A required payment under a contract.

Freehold Premises : Premises which are not subject to any charge.

Funds Flow Statement : A statement which shows inflow and outflow of funds.

G

Gross Profit Margin : Ratio of Gross profit to net sales i.e. gross profit as a percentage of net sales.


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H

Holding Company : A parent company which holds enough stock in another company to hold its board

of directors.

Human Resource Accounting (HRA) : Measuring the cost and value of employees and managers in theorganisation. It includes the measurement of the cost incurred to recruit, hire, train and develop

employees and managers.

HRA Report : After measuring the cost and value of its people, the organisation prepares a report which

is known as HRA Report.

I

Imprest: Maintained cash to meet the sundry expenses.

Income Due but not received: Receivable income but not yet received.

Income Received but not due: Income received during current accounting period which is supposed to

be received at some future date.

Income statement : Profit and loss statement that measures the firm's operations.

Insolvency : Inability of debtors to meet their debt obligations i.e. lack of liquidity.

Intangible assets: Assets like patents, copyrights, goodwill etc which are valuable but are not physical in

nature.

Interest earned ratio: Ratio which measures firm's ability to meet its interest payments out of its

annual earnings i.e. EBIT / Interest expense.

Interest rate risk : Uncertainty in expected returns of securities due to changes in interest rates.

Inventory: Stock of goods or articles.

J

Journal : A daily record of transactions in which each transaction is based on double entry bookkeeping

i.e. for all transactions both debits and credits are to be entered.

L


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Ledger: A record of all individual accounts of a business or firm.

Liability : A financial obligation which arises due to some past events or transactions in business.

M

Marketable securities : Securities which can easily be converted into cash.

Market value: Mutually accepted price of an asset between buyers and sellers. It is price at which an

asset would trade in market.

Matching Principle : States that expenses should be recorded during that period when it is incurred,

regardless the period of transfer of cash.

Miscellaneous expenditure : Lower monetary value costs are misc expenditure like various meals, ticket

prices etc.

Mortgage : A temporary pledge of property to the creditor as a security for an obligation or the debt

repayment.

N

Net block : Net block is what asset are worth to the company. Generally, it is gross block less

accumulated depreciation.

Net current assets : Current assets less current liabilities.

Net income: Total earnings of company. It represents firm's total profit or loss, calculated by taking all

revenues and deducting all the costs of the business.

Net profit margin : Net profit or income as a percent of sales i.e. net Income/ Sales.

O

Operating profit margin : Operating income / Revenue.

Outstanding expenses: Unpaid expenses.

Overdraft : When money is withdrawn from bank account and account balance is below zero.

P

Paid up capital : The amount of company's capital which has been funded by shareholders.


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Patent: The sole right to make and sell the product for set period of time.

Petty cash book : Record of entries for small amount payments.

Prepaid expenses : Expenses which have been paid but benefits of which is yet to be received.

Profit and loss account : A statement which shows all revenues and expenses of firm for a given time

period. Subtracting expenses from revenues gives net income of the firm for that time period, that's why

known as profit and loss account.

Proposed dividend : Company's board of directors declare an amount of dividend every year and this

amount is noted as a liability in balance sheet. The rate of proposed dividend can be changed by

shareholders in annual general meeting.

Provision for doubtful debts : Keeping aside an amount out of the firm's profit to meet the losses due to

doubtful debts.

Provision for tax: Keeping aside an amount to meet future tax liability.

R

Realization principle : It states that recognize the revenue only when it is earned.

Redeemable Preference Shares: Preference shares which are redeemed by issuing company at an

agreed price on a specified date.

Reserves and surplus : Accumulated profits of the firm.

Retained earnings: A portion of net income of company which is not distributed in shareholders and

reinvested in core business.

Return on equity : Equity earnings / Net worth.

S

Sales book : A complete record of sales which are made on credit.

Sales Returns Book: A record of entries of those goods which are returned by customers and earlier

sold on credit.

Secured loans : Loan backed by an asset belongs to the borrower, just to reduce the risk for the lender.

Sinking fund: Fund created by keeping aside some money annually for gradual repayment of debt.


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Sundry expenses : Miscellaneous expenses.

T

Total asset turnover ratio: Net sales/ Total assets.

U

Unsecured loans : Loans which are not backed by any security.

Common abbreviations

a.m.- Ante Meridiem

A.A.I.- Airport Authority of India

ATM- Automatic Teller Machine

AIDS- Acquired Immuno Deficiency Syndrome

BBC- British Broadcasting Corporation

ASEAN- Association of South-East Asian Nations

BSF- Border Security Force

BCG- Bacillus Calmette Guerin

CTBT- Comprehensive Test Ban Treaty

ECG- Electro Cardio Graph

EPF- Employee Provident fund

ESI- Employee state insurance

EST- Eastern standard timeFAO- Food and agriculture organization

FBI- Federal bureau of investigation

FCI- Food corporation of India

FIR- First information report

GATT- General agreement on tariffs and trade

GMT- Greenchwich mean time

ICICI- Industrial credit and investment corporation of India

INSAT- Indian National Satellite

ISI- Inter service organisation

ISRO- Indian space research organisation

IST- Indian standard time

LTTE- Liberation of tigers tamil ealern

MODVAT- Modified value added tax

p.m.- Post meridiem

PAN- Permanent account number

PCO- Public call office

PIN- Postal index number


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PTI- Press trust of India

POK- Pakistan occupied Kashmir

RSVP- Repodendeze's il vous plait

SHO - Station house officer

TADA - Terrorist and disruptive act

UTI - Unit trust of IndiaWHO- World health organization

List of Bank slogans

Multinational Bank Slogans

Name of the Bank Punch line

CITI Bank Let's get it done

Standard Chartered Bank Your Right Partner

HSBC Bank The World's Local Bank

Royal Bank of Scotland Make it happen

BNP Paribas The bank for a changing world

JPMorgan Chase Bank The right relationship is everything

Deutsche Bank A passion to perform

Scotia Bank Youre richer than you think

American Express Bank Do more

Barclays Bank Fluent in finance

DBS Bank Living, Breathing Asia

Indian Bank Slogans

Bank Name Bank Slogan

Allahabad Bank A tradition of trust


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Andhra Bank Much more to do. With YOU in focus

Bank of Baroda India's International Bank

Bank of India Relationships beyond Banking

Bank of Maharashtra One Family One Bank

Bank of Rajasthan Together we Prosper

Canara Bank It's easy to change for those who you love, Together we Can

Central Bank of India Build A Better Life Around Us, Central to you since 1911

Corporation Bank Prosperity for all

Dena Bank Trusted Family Bank

Federal Bank Your Perfect Banking Partner

HDFC Bank We Understand Your World

HSBC Worlds Local Bank

ICICI Bank "Hum Hai na..."

IDBI Bank Banking for all; "Aao Sochein Bada"

Indian Bank Taking Banking Technology to Common Man, Your Tech-friendly bank

Indian Overseas Bank Good people to grow with

J & K Bank Serving to Empower

Karur Vysya Bank Smart way to Bank

Lakshmi Vilas Bank The Changing Face of Prosperity

Oriental Bank ofCommerce

Where every individual is committed

Punjab and Sindh Bank Where series is a way of life

Punjab National Bank The Name you can Bank Upon


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State Bank of India The Nation banks on us; Pure Banking Nothing Else; With you all the

way

State Bank of Hyderabad You can always bank on us

State Bank of Mysore Working for a better tomorrow

State Bank of Patiala Blending Modernity with Tradition

State Bank of Travancore A Long Tradition of Trust

South Indian Bank Experience Next Generation Banking

Syndicate Bank Your Faithful And Friendly Financial Partner

The Economic Times Knowledge is Power

UCO Bank Honors Your Trust

Union Bank of India Good people to bank with

United Bank of India The Bank that begins with U

Vijaya Bank A Friend You can Bank Upon

Yes Bank Experience our expertise

Government Schemes

Central Government schemes in India

Aam Aadmi Bima Yojna

Started- 02-10-2007

Objective- To provide life and accident insurance to people without land living in rural areas

Working- Both State government and National government contributes Rs 200 each towards insurance

one family member of age 18-59.

Moneypaidtoinsurancebeneficiary

In case of natural death - Rs 30,000 In case death due to accident or permanent disability - Rs 75,000


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In case of permanent disability due to any accident - Rs 37,500

Doodh Ganga

Goal - Provide interest free loan and capital subsidies to diary farmers

Indira Awaaz Yojna

Started- 1985

Objective- Prociding financial assistance to rural and urban poor for construction of houses

Working- Financial assistance of Rs 70,000 in plain areas and Rs 75,000 in difficult areas is provided.

Construction of sanitary latrine and smokeless chullah is mandatory Hiring a contractor is banned House is allotted in the name of woman or jointly in the name of both man and woman.

Prefernceisgivento

Mentally challenge Physical challenged Woman headed houses Transgenders Widows and children of members of defence or police forces who died on duty

Janani Suraksha Yojana

Started - 12 April 2005

Objective - JSY aims at reducing maternal deaths by promoting deliveries in public and private health

institutions

Working - Mother should be at least 19 year old and belong to BPL or SC/ST category.

Government provides

Rs 500 in case of home delivery Rs 600 in case of mother from municipal/corporation area delivering baby in private or public

health care center

Rs 700 in case of mother from rural area delivering baby in private or public health care center


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Ladli Scheme

Started- 20 August 2008

Aim- Objective of this scheme was to raise the status of girl child and change the social mindset ofpeople towards girls in Haryana. (Separate scheme for Delhi)

Working - Financial assistance of Rs 5000 per family per year is given by state government on the birth

of second girl child. This scheme is available for parents who are domiciles of Haryana.

Ladli Laxmi Yojna

Aim- Objective of this scheme was to raise the status of girl child and change the social mindset of

people towards girls in Madhya Pradesh.

Working- Government purchases National saving certificate worth Rs 6000 per year for four years for

every girl child born after 01-04-2008 and whose parents are domicile of Madhya Pradesh.

Additional money paid on following events :-

At the time of admission in 4th standard - Rs 2000 At the time of admission in 9th standard - Rs 4000 At the time of admission 11th standard - Rs 7500 During higher secondary education - Rs 200 each month On the completion of 21 years she could receive even Rs 1 lac

Mahatma Gandhi National Rural Employment Guarantee Act

Started- 25 August 2005

Objective- To provide 100 days employment guarantee per year to unskilled labourers

Working- Government provides 100 days employment guarantee per year to unskilled labourer to do

public works for which he is paid Rs 120 per day. In case Government is unable to provide employment

to labourers then it need pay labourers for 100 days at their home.

Budget aloocated for MNREGA- Rs 45000 crores ( 2012-2013)

Midday Meal Scheme

Started- Started on different dates in various states in India. It was first introduced in Uttar Pradesh

Objectives- Providing free lunch on working days to primary and upper primary students of government

schools in India. This scheme aims at promoting education and removal malnutrition in children.


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National Pension Scheme India

Started - 1 January 2004

Objectives- Provides social security to Government employees on retirement

Working- 10% of basic salary is deducted from basic salary and DA and contributed to pension fund.

Central government makes equal contribution to the fund.

Pradhan Mantri Gram Sadak Yojana

Started- 5 December 2000

Objective- To provide roads in villages with population of 1000+

Rashtriya Krishi Vikas Yojana

Started- August 2007

Objective- This scheme aims at achieving 4% annual growth in agriculture sector.

Working- Rs 5875 crores will be in agricultural sector in 11th five year plan to improve agricultural

productivity.

Rashtriya Swasthya Bima Yojana

Started- April 1, 2008

Objective- Providing health insurance to poor people living below poverty line and holding yellow card

Working- Anybody holding yellow card need to register for this scheme and get a smart card. Family get

insurance of Rs 30,000 per family. This is cashless facility to get treatment in public as well as privatehospitals.

Sampoorna Grameen Rozgar Yojana

Started- 25 September 2001

Aim- Started by cobining two ongoing schemes namely Jawahar Gram Smridhi Yojana and employment

Assurance Scheme. This scheme was started to provide supplementary employment so that labourers in

rural areas can earn extra and thus providing food security to them.

Working - Budget of Rs 10,000 crores has been alloted which is to be provided in ratio of ratio of 75:25

by Center and State and government.

Sarva Shiksha Abhiyan


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Started- 2001

Aim- Provide useful and free education to children in the age group of 6 -14 years under RTE act 2009

Funds allocated- Rs 61,734 crores allocated in 2011-12

Swabhiman

Started- 10 February 2011

Aim- To provide banking facilitates in rural areas with banking services. Goal of this scheme is to start

banking services in 20,000 villages without banking services with a population of 2000 by March 2012

Swarnajayanti Gram Swarozgar Yojana

Started- 1 April 1999

Objective- SGSY provide assistance to rural people living below poverty line to take up self

employment.

Swavalamban

Started- 2010 (Will be closed on 2017-2017)

Goal- To encourage workers working in unorganized sector to save for their retirement

Working- Workers must invest contribute minimum Rs.1000 to maximum Rs.12000 per year into their

NPS account. Government will contribute Rs 1000 per year to NPS account per year.

Documents

IBPS Banking Awareness