SELECTED FINANCIAL TERMS at IOB
What is FINANCIAL TERMS?
Finance is a broad term that describes activities associated with banking, leverage or debt, credit, capital markets, funds, and investments. Basically, finance represents the getting, the spending, and the management of money.
Overview
In other words, finance helps us make better decisions with our money and accounting enables us to keep track of it. You use finance in innumerable everyday financial scenarios, such as: Making a budget for your groceries. Deciding how much of your paycheck you want to save and how much you want to invest or spend.
Frequently Asked Questions
What are basic financial terms?
The three major asset classes are stocks, bonds and cash (or cash equivalents). Each of these reacts differently to conditions in the market and economy, so be sure you choose those that line up best with your personal goals, risk tolerance and time horizon.
What are the terms of financial management?
Some common terms include: Profit and loss (P&L) statement: This is a report of your income and expenditure for a specific period of time, e.g. a month, a quarter, a year. Balance sheet: The balance sheet is the total picture of a company’s worth at a given point in time, e.g. 30 June.
What is financial and example?
Finance is defined as to provide money or credit for something. An example of finance is a bank loaning someone money to purchase a house.
What are the 3 types of finance?
The finance field includes three main subcategories: personal finance, corporate finance, and public (government) finance.
What is a business term?
A business term is a word or phrase that describes a concept that is used in a particular branch of business. Examples may include annual leave,, customer, purchase order, personal loan.
Why is it important to know financial terms?
Knowing finance terms is important because it can help you understand and manage your financial situation. For example, you can utilize this knowledge to make significant financial decisions, such as taking out loans, renting or buying property and planning for retirement.
What is the terms of accounting?
They are entered chronologically. Liability – Liabilities are the obligations of an entity, usually financial in nature. Liquid Asset – Consist of cash and other assets that can be easily converted to cash. Loan – A monetary advance from a lender to a borrower. Master Account – A Master Account has subsidiary accounts.
What are finance functions?
The finance function includes judgments about whether a company should make more investment in fixed assets or not. It is largely concerned with the allocation of a firm’s capital expenditure over time as also related decisions such as financing investment and dividend distribution.
What is the difference between money and finance?
Money is a part of finance, but finance includes several other things as well. Money acts as a medium of exchange, store of value, a unit of account, and sometimes it can also act as a standard for deferred payments. Finance: This is the study of money and involves planning to use it.
What are the 5 principles of finance?
The five principles are consistency, timeliness, justification, documentation, and certification.
What are the two main types of finance?
External sources of financing fall into two main categories: equity financing, which is funding given in exchange for partial ownership and future profits; and debt financing, which is money that must be repaid, usually with interest.
What financial term means the money you spend for business operations?
An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX, operating expenses include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds allocated for research and development.
What do you mean by the terms?
1 : a word or expression that has an exact meaning in some uses or is limited to a subject or field legal terms. 2 : a period of time fixed especially by law or custom a school term. 3 terms plural : conditions that limit the nature and scope of something (as a treaty or a will) the terms of a contract.
What is standard term?
Standard Term means the period during which you are authorized to use the Services as specified in an Order.
Why should I study finance?
In other words, finance helps us make better decisions with our money and accounting enables us to keep track of it. You use finance in innumerable everyday financial scenarios, such as: Making a budget for your groceries. Deciding how much of your paycheck you want to save and how much you want to invest or spend.