Accounting and finance Terminology

31. Accrued Income : Accrued income means  income which has been earned by the business during the accounting year but which has not yet been due and, therefore, has not been received.

32. Out standing Income : Outstanding Income means income which has become due    during the accounting year but which has not so far been received by the firm.

33. Suspense account: The suspense account is an account to which the difference in the  trial balance has been put temporarily.

34. Depletion: It implies removal of an available but not replaceable source, Such as   extracting coal from a coal mine.

35. Amortization:  The process of writing of intangible assets is term as amortization.

36. Dilapidations: The term dilapidations to damage done to a building or other property during tenancy.

37. Capital employed: The term capital employed means sum of total long term funds employed in the business. i.e.

(share capital+ reserves & surplus +long term loans –(non business assets + fictitious assets)

38. Equity shares: those shares which are not having pref. rights are called equity shares.

39. Pref.shares:  Those shares which are carrying the pref.rights is called pref. shares

Pref.rights in respect of fixed dividend. Pref.right to repayment of capital in the even of

company winding up.

40. Leverage: It is a force applied at a particular work to get the desired   result.

41. Operating leverage: The operating leverage takes place when a changes    in revenue   greater changes in EBIT.

42. Financial leverage : It is nothing but a process of using debt capital to increase the rate of return on equity

43. Combine leverage: it is used to measure of the total risk of the firm = operating risk +

financial risk.

44. Joint venture: A joint venture is an association of two or more the persons who          combined for the execution of a specific transaction and divide the profit or loss their of an agreed ratio.

45. Partnership: partnership is the relation b/w the persons who have agreed to share the      profits of business carried on by all or any of them acting for all.

46. Factoring: It is an arrangement under which a firm (called borrower) receives     advances against its receivables, from a financial institutions (called factor)

47. Capital reserve: The reserve which transferred from the capital gains is called capital    reserve.

48.General reserve: the reserve which is transferred from normal profits of the firm is     called general reserve

49. Free Cash: The cash not for any specific purpose free from any encumbrance like     surplus cash.

50. Minority Interest: Minority interest refers to the equity of the minority shareholders in     a subsidiary company.