FOR INDIA'S BEST CA CS CMA VIDEO CLASSES CALL 9980100288 OR VISIT HERE
Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?

Common Business Terminologies Notes-CSEET

Common Business Terminologies Notes-CSEET

The topic of ‘Business Terminology’ is the main vehicle by which facts, opinions and other ‘higher’ units of knowledge are represented and conveyed. Sound terminology work is meant for reducing ambiguity and increasing clarity. Terminology can thus be a safety factor, a quality factor and a productivity factor in its own right. In other words, the quality of specialist communication depends to a large extent on the quality of the terminology employed. Moreover it is not possible to look up a word in a dictionary all the time. Thus, voluntarily or involuntarily we memorize the words of daily use. Making these terms a part of our daily conversation can surely help us to instil these terms in the memory. Hence we need a glossary of business terms providing us with definitions of the common words used in all the aspects of business. This business glossary serves as a ready guide for business proprietors, managers, students and general readers. Various spheres and topics have been covered which range from accounting, banking, taxation, advertising, business law, communications, economics, finance, insurance, international business, management, marketing, real estate and various other areas of business. Therefore, we need to know their origins and meanings. Firstly let us have a glance at the most ‘basic’ and the most ‘advanced’ terms of 21st century just for curiosity, motivation and involvement:

Ten Basic but Most Important Terms / Words in Business English

  • Management : those in charge of running a business
  • Business : the activity of providing goods and services involving financial and commercial and industrial aspects
  • Marketing : the commercial processes involved in promoting and selling and distributing a product or service
  • Profit : the amount of money left over after expenses are taken out
  • Telecommuting : involves working at home usually on a computer
  • Downsizing : a planned reduction in the number of employees needed in a firm in order to reduce costs and make the business more efficient
  • Outsourcing : contracting out selected functions or activities of an organization to other organizations that can do the work more cost efficiently
  • R & D or Research and Development : Business or government activity that is purposely designed to stimulate invention and innovation
  • Headquarters : (usually plural) the office that serves as the administrative center of an enterprise
  • Market : the world of commercial activity where goods and services are bought and sold
ACCEPTANCE (BILL OF EXCHANGE)Assent given by a party to a bill of exchange by signing across the face of it. Acceptance may be done online by clicking on the Accept button.
ACKNOWLEDGMENTThe signature of a clerk or attorney certifying that the person signing the document has signed by his or her free act and for the purposes set forth therein.
ACQUISITION COSTSAcquisition costs are the incremental costs involved in obtaining a new customer.
ACT OF GODA term usually used in insurance to denote risks and dangers arising out of natural causes that are beyond human control.
ACTIONAlso called a case or lawsuit. A civil judicial proceeding where one party sues another for a wrong done, or to protect a right or to prevent a wrong.
ADBAsian Development Bank
ADJOURNMENTPostponement of a court session until another time or place.
ADJUDICATIONA decision or sentence imposed by a judge
AFFIDAVITA written statement signed in the presence of a judicial officer, a Notary Public or an Oath Commissioner that is admissible as evidence in a court of law.
AFFIRMATIONDeclaring something to be true under the penalty of perjury by a person who will not take an oath for religious or other reasons.
AGENDAA program listing items of business to be transacted in a meeting.
AGENTA person appointed to act generally or for a special business purpose on behalf of the Principal usually on payment of a commission.
ALLEGATIONSaying that something is true. The assertion, declaration or statement of a party in a case, made in a pleading.
ALLOTMENTIssue of shares or debentures to an applicant after payment of notified price.
AMALGAMATIONThe coming together of two or more previously autonomous businesses into a single undertaking.
AMERICAN DEPOSITORY RECEIPTS (ADR)A receipt showing evidence that shares of a foreign corporation are held on deposit or under control of an U.S banking institution. Used to facilitate transactions and expedite transfer of beneficial ownership for a foreign security in the United States.
AMORTISATIONThe extinction or gradual writing off of liability or debt over a period of time, loosely speaking, through depreciation of wasting assets through operation of a sinking or purchase fund.
ANNUAL RETURNA statutory document filed by every company annually with the Registrar of Companies, stating the particulars such as status, names of directors, shareholders, indebtness etc. of the company.
ANNUITYA fixed sum of money payable for the whole or a part of a person’s life under the terms of an insurance policy or a Will.
APPEALAppeal is a process by which the correctness of the decision of a lower court or tribunal is questioned in a higher court.
APPEARANCEThe official court form filed with the court clerk which tells the court that you are representing yourself in a lawsuit or criminal case or that an attorney is representing you. All court notices and calendars will be mailed to the address listed on the form. When a defendant in a civil case files an appearance, the person is submitting to the court’s jurisdiction.
APPELLANTThe party appealing a decision or judgment to a higher court.
ARBITRAGEThe business of taking advantage of difference in price of a security traded on two or more stock exchanges, by buying in one and selling in other or vice versa.
ARBITRATIONA quasi-judicial arrangement whereby a dispute between parties is resolved by referring it by mutual consent to arbitrators whose decision is binding.
ARRESTWhen a person is taken into custody by a police officer and charged with a crime.
ASSETAnything to which money value can be attached, owned by a business or individual. It may be financial such as cash; physical, such as land/building; tangible, such as patent, trademark; or intangible, such as goodwill.
ASSET TURNOVERAsset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
ASSETSAssets include everything that a company owns and has some economic value.
ASSIGNMENTA transfer of right, title or interest in a property from one person to another. For an assignment to have legal effect it must be absolute, in writing and be communicated to the one owing the right.
ASSOCHAMAssociated Chamber of Commerce & Industry – one of the bodies representing the Indian industry.
ASSURANCEThe term originally denoted a form of protection against events, which must happen i.e. death. Insurance was used for cover against loss linked with contingencies such as fire or lightening.
ATTACHMENTA lien on property or assets to hold it to pay or satisfy any final judgment.
ATTESTATIONAttestation is authentication of a signature by an authorized person, who could be an oaths commissioner or a notary public.
ATTORNEYA person legally appointed or empowered to act on behalf of another during the latter’s lifetime for a specific or general purpose.
ATTORNEY OF RECORDAttorney whose name appears in the permanent records or files of a case.
AUCTIONA public sale conducted by the auctioneer in which the goods are given away to the highest bidder at the fall of a hammer.
AUDITAn examination of accounts and their underlying records in order to be able to express an opinion on their honesty and trueness, with a report on them by the internal staff or a firm of auditors.
BAD DEBTAn open account balance or loan that is proved to be impossible to be collected.
BAILAlso called Bond. Money or property given to the court for the temporary release of a defendant, to ensure that the defendant will return to court.
BALANCE SHEETThe financial statement generally prepared at the end of a period usually the financial year showing the assets, liabilities and net worth of an organisation.
BANK ACCOUNTA bank account allows the account holder to deposit, safeguard his money, earn interest, and make cheque payments.
BANK RATEThe maximum lending/borrowing rate determined by the Reserve Bank of India from time to time taking into account the state of economy.
BANK STATEMENTA statement issued in loose-leaf or Passbook form by the bank showing credit-debit entries and the balance in an account during a given period.
BANKRUPTCYA legal condition where a person or a business in which liabilities exceed the assets and the debtor is unable to repay amounts owed.
BOOK VALUEThe value of an asset as appearing in the Books of Accounts, after the accounting processes to which it has been subject and is not necessarily the market value of the said asset.
BOOKKEEPINGA method of accounting that involves the timely recording of all financial transactions for the business.
BOUNCED CHEQUEA bounced cheque is a normal cheque which a bank refuses to pay. The reasons for refusing it include insufficient funds, signature mismatch, or some other valid reason.
BREAK-EVEN POINTBreak-even point is output of the standard break-even analysis. The unit sales volumes or actual sales amounts that a company needs to equal its running expense rate and not lose or make money in a given month.
BUY-SELL AGREEMENTA buy-sell agreement is an agreement designed to address situations in which one or more of the entrepreneurs wants to sell their interest in the venture.
CALLA demand made by a limited company to the holders of partly paid- up shares to pay a further instalment towards the nominal value of their shares.
CAPITALThe amount of money, invested in a business; available for working; manifest in tangible goods like building and machinery or in the form of circulating assets. The term has several specific uses. Money spent on improvement of fixed assets and not chargeable against profits is known as Capital Expenditure.
CAPITAL EXPENDITURESpending on capital assets (also called plant and equipment, or fixed assets, or long-term assets).

Capital assets are long-term assets, also known as fixed assets.

CASEA lawsuit or action in a court.
CASE LAWSJudgements by courts usually of higher courts, in leading cases, which are treated as authorities and quoted and relied on in similar cases by the lower or same level courts.
CASH DISCOUNTA discount offered in addition to normal trade discounts when payment is made in cash before the expiry of the period of credit.
CASH FLOW STATEMENTThe cash flow statement is one of the three main financial statements (along with income statement and balance sheet), the cash flow statement shows actual cash inflows and outflows of the business over a specified period of time.

The cash flow statement reconciles the income statement (profit and loss) with the balance sheet.

CAUSE LISTCause list is issued by the Registry of the matters to be heard by the court on any day. Cause list contains information like bench, courtroom number and the position of the matter.
CAVEAT EMPTORA legal doctrine literally meaning ‘let the buyer beware’ of what he is buying and satisfy himself about the quality and condition of what he is buying.
CHEQUEA negotiable instrument drawn on a bank where the drawer has an account ordering the bank to pay the stated sum to a person or to the order of another person. When the cheque is bearer, payment is made on presentation. Order cheques require endorsement while crossed ones are paid into an account. Blank cheque is for an unspecified amount while a stale cheque is more than six months old and no longer valid.
COLLATERALA security generally in the form of fixed assets and offered in addition to those already furnished.
COMMISSION(i)    A payment in percentage terms made to an agent or a broker for goods sold or services performed. When responsibility for payments is also accepted, an extra del credere is payable.

(ii)   The charge based on the percentage of funds invested which is paid by an investor to a broker or a financial advisor.

COMMON LAWLaws that develop through case decisions by judges. Not enacted by legislative bodies.
COMPLAINTA legal document that tells the court what you want, and is served with a summons on the defendant to begin the case.
CONDITIONA stipulation that is binding on signatories of a legal contract and the breach of which entitles the aggrieved party to rescind the contract.
CONSIGNMENTTransferring the title of goods, the details of which are given in the Proforma Invoice, to an agent for sale. The proceeds and account of sale are furnished to the consignee periodically.
CONSORTIUMAn association of companies formed for the purpose of undertaking a particular activity. There may be no other connection between the companies outside the scope of activities. It is usually to share the limited resources and risks associated with the activity undertaken.
CONTEMPT OF COURTA finding that someone disobeyed a court order. Can also mean disrupting court, for example, by being loud or disrespectful in court.
CONTRACTAn agreement between parties in order to create legal obligations under a seal or for a consideration and enforceable by law.
CONVICTIONTo be found guilty of committing a crime
COSTSExpenses in prosecuting or defending a case in court. Usually does not include attorney’s fees.
COVER NOTEA document issued by an insurance company to provide cover to the insured till a formal policy document is issued.
CREDITLiterally “trust or belief”. In commerce, it means giving goods the payment for which is to be made at a subsequent date.
CREDIT NOTEA document sent by a seller to a buyer to rectify an error of overcharge in an invoice or to allow credit for goods returned. It is entered in the books of account.
CRISILCredit Rating and Information Services of India Limited. It is an agency set up in April 1988 that
CRISISReckless heavy short sales leading unduly to depressed prices. In such a situation the Governing Board of the Stock Exchange may prohibit short sales, fix minimum prices below which sales or purchases are not permitted and also take any other suitable corrective action.
CROSS-EXAMINATIONQuestioning by a party or the attorney of an adverse party or a witness.
CRRCash Reserve Ratio notified by the Reserve Bank of India from time to time. It indicates the reserves of commercial banks set apart as a measure of security.
CURRENT ASSETSCurrent assets are the same as short-term assets.
CURRENT DEBTCurrent debt refers to short-term debt and short-term liabilities.
CURRENT LIABILITIESCurrent liabilities refers to short-term debt and short-term liabilities.
DAMAGESCompensation awarded by a court of law for breach of contract in a civil litigation.
DAY ORDERAn order which remains valid for the day it is entered, unless matched, it is automatically cancelled at the end of the trading.
DEBENTURESAn instrument/security through which a company may borrow funds from public or public financial institutions, on which interest usually is payable on specific dates and principal amount repayable on a particular date on redemption of the same.
DEBIT NOTEA note sent by seller to buyer to rectify an undercharge in the original invoice. It is in the nature of a supplementary invoice.
DEBT AND EQUITYDebt and equity is the sum of liabilities and capital. This should always be equal to total assets.
DEBT FINANCINGWhen you borrow money from a lender and agree to repay the principal with interest in regular payments for a specified period of time, you’re using debt financing. Traditionally, it has been the most common form of funding for small businesses.

Debt financing can include borrowing from banks, business credit cards, lines of credit, personal loans, merchant cash advances, and invoice financing. This method creates a debt that must be repaid but lets you maintain sole control of your business.

DECLARATIONAn unsworn statement of facts made by a party to the transaction, or by one who has an interest in the facts recounted.
DEEDA legal document in writing, signed, sealed and delivered by the person making the deed.
DEFAULTTo fail to respond or answer to the plaintiff’s claims by filing the required court document; usually an Appearance or an Answer.
DEFENDANTIn civil cases, the person who is given court papers, also called a respondent. In criminal cases, the person who is arrested and charged with a crime.
DEMATERIALISATIONConversion of debentures from electronic form. securities paper or such as physical shares/ form to
DEPOSITORYThe system of organisation which works through registered members called depository participants, to maintain a record of securities in electronic or dematerialised form. Transactions in such shares are recorded immediately by the depository participants in the accounts of shareholders who hold the shares in dematerialised form.
DEPRECIATIONThe fall in the value of a fixed or movable asset due to wear and tear or passage of time. Such amounts may be written off or provide a replacement through another fund.
DERIVATIVE MARKETSMarkets such as futures and option markets that are developed to satisfy specific needs arising in traditional markets. These markets provide the same basic functions as forward markets, but trading usually takes place on standardised contracts.
DIFFERENTIATIONDifferentiation is an approach to create a competitive advantage based on obtaining a significant value difference that customers will appreciate and be willing to pay for, and which ideally will increase their loyalty as a result.
DISBURSEMENTA legitimate payment of money out of some fund.
DISCOUNTA reduction from a stated amount.
DISCOUNTED BILLA Bill of Exchange encashed for a charge by the banker before the date on which it becomes payable.
DISMISSALA judge’s decision to end the case.
DISPOSEEnding a legal case or a judicial proceeding.
DISPOSITIONThe manner in which a case is settled or resolved.
DISSOLUTIONThe legal end of a marriage, also called a divorce.
DIVIDENDA return on investment on securities such as shares dependent on the profitability of the company. It is distributed through dividend warrants similar to cheques. Alternatively it may be credited to the bank account or Demat account of the shareholder.
DOCUMENTS OF TITLEDocuments which provide conclusive evidence of ownership of some asset. Usually denotes non- negotiable documents such as Bills of Lading or Delivery Challans showing the transfer of title to the transferee for a specific period or purpose say transportation. In international trade, usually attached with bills of exchange.
DOMICILEThe permanent home of a person. A person may have several residences, but only one domicile.
DRAFTA document requiring one party, usually a bank, to make payment to another from funds which are held by the former.
DUMPINGSelling goods in a market usually overseas, at a price well below cost, usually with an intention to ruin the indigenous market/competition.
EARNEST MONEYA refundable security in the form of demand draft or bank guarantees to keep off non-serious applicants usually for tenders. It is also given by a buyer to the seller to bind the bargain and may be adjusted later with the cost of the purchase.
EARNINGS BEFORE INTEREST AND TAXES (EBIT)EBIT refers to earnings before interest and taxes.
EARNINGS BEFORE INTEREST TAXES DEPRECIATION AND AMORTIZATION (EBITDA)Earnings before interest, taxes , depreciation and amortization (or EBITDA) is equal to the gross margin (the difference between total sales revenue and total direct cost of sales) minus total operating expenses (tax-deductible expenses incurred in conducting normal business operations, such as wages and salaries, rent, and so on), plus any depreciation (The loss of value of assets over time) and amortization.
This is similar to earnings before interest and taxes (EBIT). The difference between the two is that EBIT subtracts all expenses, including depreciation, as an expense, and EBITDA subtracts all expenses except depreciation and amortization.
ECONOMIES OF SCALEEconomies of scale refers to the benefit that larger production volumes allow fixed costs to be spread over more units lowering the average unit costs and offering a competitive price and margin advantage.
EDEnforcement Directorate, that looks into violations involving foreign exchange.
ENCUMBRANCESome liability which is attached to a property and thereby, imposes a burden on the owner.
ENDORSEMENTA writing on the back of a bill of exchange i.e. an Order cheque authorising the bank to pay to the bearer or a specified person or prohibit further endorsements. The effect of endorsement is to vary the terms of the document.
ENTREPRENEURAn entrepreneur is someone who starts a new business venture; someone who recognizes and pursues opportunities others may not see as clearly, and finds the resources necessary to accomplish his or her goals.
EPSEarnings per share. A company’s net profit attributable to equity/ ordinary shareholders divided by the number of such shares that have been issued and paid-up.
ESCROWA legal document kept in the custody of a third party, taking effect or made available only when some conditions are satisfied or some period of time has elapsed.
ESOPEmployee Stock Option Scheme.
ESTIMATEA forecast of the total cost of a particular work given before the work is actually undertaken by the person who may be called upon to undertake it.
EVIDENCETestimony, documents or objects presented at a trial to prove a fact.
EX GRATIASome action, normally the payment of money, taken where there is no legal necessity to do so but where some moral obligation is recognised.
EXPARTEDone for, or at the request of, one side in a case only, without prior notice to the other side.
EXCHEQUERThe treasury of the Government.
EX-DOCK/SHIP/

WAREHOUSE

The prices, which exclude all expenses after the goods have been delivered on the docks, the side of the ship or at the designated warehouse.
EXECUTORA person named in the Will of the deceased testator to administer/ carry out its provisions/ directions.
EXPECTED RETURNThe return an investor might expect on an investment if the same investment were made many times over an extended period. The return is found through the use of mathematical analysis.
EXTRINSIC VALUEThe amount by which the market price of an option exceeds the amount that could be realised if the option were exercised and the underlying commodity liquidated. Also known as time value.
FACE VALUEA value evident from an examination of the object itself. Usually means the amount printed on the face of a security as opposed to its market value. Also known as nominal value, which may be higher or lower than the market value.
FACTORA mercantile agent who deals in his own name but enjoys the right to hold and dispose off goods on behalf of the principal at pre­negotiated terms.
FEMAThe Foreign Exchange Management Act, which replaced and is considered more liberal than FERA, the Foreign Exchange Regulation Act.
FICCIFederation of Indian Chamber of Commerce & Industry, is also a representative body of Indian industry.
FIDUCIARYImposing the obligations of a trust. A fiduciary relationship imposes a legal as well as moral relationship.
FINANCIAL STATEMENTSAn integral part of the loan application process is furnishing information that shows your business is a good credit risk. The standard financial statement packet includes four main reports: the income statement, the balance sheet, the statement of cash flow, and the statement of shareholders’ equity, if you have shareholders.
Lenders and investors want to see that your business is well-balanced with assets and liabilities, has positive cash flow, and will have capital to make expected repayments.
FINDINGThe court’s or jury’s decision on issues of fact.
FIPBForeign Investment Promotion Board, which clears proposals involving foreign direct investment (FDI) into India.
FIRMA collective name given to partners in a business.
FIRM OFFERA commitment to sell at a certain price subject to acceptance of offer within a specified time.
FISCALRelating to the raising and use of money by the Government.
FIXED ASSETSAlso known as long-term assets or non-current assets, these are things that are of a fixed nature because they cannot be easily converted into cash and often require complex procedures and a significant amount of time before you can have their cash value in hand. For instance, fixed assets would encompass things like land, real estate, machinery and equipment, and furniture.
FIXED INTEREST RATEThe interest rate on a loan that is established in the beginning and does not change for the lifetime of the loan is said to be fixed. Loans with fixed interest rates are appealing to small business owners because the repayment amounts are consistent and easier to budget for in the future.
FLOATING INTEREST RATEIn contrast to the business finance term and definition fixed rate, the floating interest rate will change with market fluctuations. Also referred to as variable rates or adjustable rates, these amounts may often start out lower than the fixed rate percentages. This makes them more appealing in the short term if the market is trending down
FOREIGN EXCHANGEA term denoting currency of another country. When held by the State, it constitutes the forex reserves. The rates of different currencies are settled either by market forces or by the State, which may link its own currency with a single or basket of external currencies.
FOREIGN EXCHANGE

RATE

The price of one currency in terms of the other.
FORWARD CONTRACTA contract where a party agrees to deliver at a specified future time a certain amount of specified securities at an agreed rate.
FORWARD DELIVERYA term implying that goods transacted will be delivered at a future date on agreed terms.
FORWARD TRADINGIt means deferment of contracts traded at present to some future date at current prices.
FREIGHTA consideration paid for the carriage of goods. An account of freight payable is called Freight Note.
FUTURESThe purchase of commodities or currencies or financial instruments for delivery at some future time. It protects the buyer against a possible rise in prices. Trading in futures may carry an element of speculation and is also done as a hedging exercise.
GAAPGenerally Accepted Accounting Principles.
GDPGross Domestic Product – The total value of all the goods and services produced by a country for use within its own borders during a particular period.
GDRGlobal Depository Receipts.
GOODWILLAn intangible saleable asset, such as reputation or location of a business, which makes the business worth more than its book value.
GRIEVANCEA complaint filed against an attorney or judge, claiming an ethics violation.
GROSS PROFITThis business finance term and definition can be calculated as total sales (income) less the costs (expenses) directly related to those sales. Raw materials, manufacturing expenses, labor costs, marketing, and transportation of goods are all included in expenses.
GUARANTEEAn undertaking by a person in writing to be answerable for the deeds of another. The liability of guarantor or surety is secondary and is invoked only when the original party defaults.
GUARANTORA guarantor creates a trust which takes the responsibility of repayment of a loan. Usually, a guarantor is not liable for the repayment of the loan. However, in some cases, the liability and responsibility of repaying the loan lie with the guarantor.
GUARDIANA person who has the power and duty to take care of another person and/or to manage the property and rights of another person who is considered incapable of taking care of his or her personal affairs.
HABEAS CORPUSA court order used to bring a person physically before a court in order to test the legality of the person’s detention. Usually, it is directed to the official or person detaining another, commanding him to bring the person to court for the judge to determine if that person has been denied liberty without due process of law.
HEDGEReducing risk by taking a position which offsets an existing or anticipated exposure in financial operations.
HIRE-PURCHASEAn agreement to hire goods for use with an option to transfer the title after payment of the instalments agreed upon.
HOLDING COMPANYA company which controls the activities of one or more companies which are known as subsidiary companies.
HYPOTHECATIONThe act of pledging or mortgaging movable or immovable assets.
IASInternational Accounting Standards.
IMFInternational Monetary Fund.
INCOME STATEMENTThe income statement is where you analyze your company’s profits and losses. As such, it should come as no surprise that the income statement is also commonly referred to as the “profit and loss statement.”
This document summarizes the profits and losses incurred during a specified period, which is usually a fiscal quarter or a full calendar year. As such, it provides important information about your company’s ability to generate profit by increasing its revenue, decreasing its losses, or a combination of both.
INCOME TAXA direct and graded tax imposed by the government upon income.
The tax on income of corporate and other business enterprises may be higher than that of individuals.
INDEMNITYA contractual obligation to compensate some other person in the event that a loss is suffered by them for a specified cause.
INDENTAn order sent to the agent to buy goods. It may mention specific goods or source from which to procure. Alternatively it may be left to the agent.
INDENTUREIt is deed signed between two or more parties as opposed to one made by a single party.
INFLATIONAn increase in money supply without a corresponding increase in production. This leads to an increase in prices.
INJUNCTIONIt is an order of the court directing a person to act or refrain from acting in a certain manner. Injunctions are often issued to prevent people from harming others.
INSIDER TRADINGTrading in a company’s shares by a person connected with and having access to its sensitive, unpublished and confidential information.
INSOLVENCYA state where the total assets of an entity are insufficient in value to meet its total liabilities. It may lead to bankruptcy with the pronouncement by a court.
INSTRUMENTA formal, legal document.
INSURANCEIt is an arrangement under which the insurer agrees to compensate the insured in the event of a loss on payment of a premium. A proposal form has to be submitted. The premium depends on the extent of cover and the risk perception of the insurer. In the event of default in payment of premium, the contract becomes null and void unless revived.
INTANGIABLE ASSETAn asset which has no physical or documentary form.
INTELLECTUAL PROPERTYA valuable intangible asset created by the exercise of human intelligence and imagination.
INTERESTIt is a payment made for the use of borrowed funds. It may be either simple or compound. It may be calculated on the basis of a flat rate on the total principal or on the reducing balance of the principal, as per the loan agreement.
INTEREST RATEAll loans and other lending instruments are assigned the business finance key term interest rates. This is a percentage of the principal amount charged by the lender for the use of its money. Interest rates represent the current cost of borrowing.
INTERNET BANKINGMost banks allow account holders to access their accounts using the internet. You can also perform certain transactions using this system. This is internet banking or online banking or e-banking.
INVENTORYIt is a list of items in stock at a given point of time.
INVOICEIt is document sent by a seller to the purchaser giving descriptions of goods, their quantity/ number, prices and total amount payable.
IRDAInsurance Regulatory and Development Authority.
JUDGMENTThe decision/ruling of a court of law in a civil or criminal litigation.
JUMBO CERTIFICATEA document issued by consolidating or aggregating a large number of market lots into a single composite share certificate.
JURYIt is a body of persons appointed to hear evidence and give their verdict in a criminal trial.
KINDThe basis of payment made in the form of goods or services rather than money.
LABOUR INTENSIVEThe characteristic of production methods which require large application of labour and uses relatively little capital.
LANDING ORDERIt is an order to facilitate the delivery of a ship’s cargo issued after the completion of formalities. The loading or the discharge of cargo has to be completed within the lay days failing which a demurrage has to be paid.
LAUNDERINGThe process of passing funds through a number of transactions with the intention to conceal their origin.
LEASEThe right to use a property for a specified term in lieu of lease-money or rent paid periodically. The lessor has to execute a deed in favour of lessee containing terms and conditions of lease.
LEGAL TENDERThe form of money that may be legally used to pay for the goods procured or the services used. For example, the currency notes issued by the Reserve Bank of India constitute a legal tender in India.
LETTER OF CREDITIt is a letter addressed by a banker to a correspondent abroad authorising payment of a specified sum on its credit to the mentioned beneficiary under stated conditions, i.e., delivery of goods in a satisfactory condition. Letters of Credit are common in international trade and protect the interest of the exporter.
LIABILITIESA legal obligation, by an individual or a body of persons, expressed in terms of money. Current liabilities are those that have to be discharged in the near future, like bills payable or bank overdrafts. Contingent liabilities are those whose existence or otherwise will be confirmed by the outcome of some future event and at times may not have to be met at all if the event does not occur.
LIBELDefamatory material in recorded form as opposed from slander which is oral. The victim may file a suit for damages.
LICENCEA document issued by a competent authority granting permission to carry on some activity, which otherwise will be unlawful.
LIENThe right to retain some asset till a claim is settled or a contractual obligation has been fulfilled. A General lien refers to a right to retain any property of the debtor’s while a Particular lien permits the retention of the particular property connected with the claim.
LIMITED LIABILITYThe liability of a member to contribute to the assets of a company upto the nominal value of the shares held and not paid by him.
LIQUIDATORAn official appointed to conduct the winding up of a company in accordance with due process of law.
LIQUIDITYLiquidity is an indicator of how quickly an asset can be turned into cash for full market value. The more liquid your assets, the more financial flexibility you have.
LITIGANTA party to a case.
MANDATEAuthority given to take some action.
MANIFESTA declaration by the master of the ship about to set sail. It gives details about the crew, cargo, passengers and the port of destination.
MARKET LOTThe minimum number of shares, say 100, required for a transaction on a Stock Exchange. Fewer shares constitute an odd lot. In Demat form, even a single share may be traded.
MCAMinistry of Corporate Affairs.
MEDIATIONA dispute resolution process in which an impartial third party assists the parties to voluntarily reach a mutually acceptable settlement.
MEMORANDUM OF ASSOCIATIONA fundamental document which contains the provisions of the company’s constitution, which is filed with the Registrar of Companies at the time of the incorporation of a company. It states the name of the company, its objectives, the amount of capital etc.
MERCHANT BANKERA financial institution that specialises in securities market activities such as underwriting and trading, and in advisory activities such as mergers and acquisitions. Merchant Banking also typically refers to acquisition of equity stakes in companies either for strategic or temporary investment purposes.
MERGERThe amalgamation of two or more enterprises which were previously separate usually to achieve greater viability and control. The new entity may retain the old name in full or part thereof for reasons of Goodwill.
MINIMUM SUBSCRIPTIONThe minimum number of shares for which applications have to be received by a company in a public issue before allotment can be made by it.
MONOPOLYA exclusive right or privilege created through law or by acquiring and exercising control with a view to regulating the price. When used by State for public benefit, a monopoly may be useful but as a matter of principle, it is harmful.
MORATORIUMA freeze on the payment of debts by a government in times of national crisis or an emergency.
MORTGAGEA legal charge on property which holds it as security for a loan.
NABARDNational Bank for Agricultural & Rural Development.
NASDAQNational Association of Security Dealers Automated Quotations.
NEGOTIABLE

INSTRUMENTS

A document in which property may be transferred to another in good faith by simple delivery, for e.g. Cheques, Bank Notes, Treasury Bills, Dividend Warrants. When made to order, they require endorsement but if in favour of bearer, they may be negotiated straightaway.
NET PROFITThe amount remaining after all expenses have been deducted from the gross profit. It may be distributed in the form of dividend.
NET WORTHThis business finance term and definition is an expression of your business’s total value, as determined by your total current assets less the total liabilities currently owed by the business. With your business’s most recent balance sheet in hand, you can calculate the net worth using a simple formula: Assets – Liabilities = Net Worth.
NO-DELIVERY PERIODThe time during which the register of shareholders of a company remains closed. Transactions continue but the trades are settled later. This is done to avoid confusion about the beneficiaries of dividend.
NON-CUMULATIVEImplies that arrears of dividend will not accrue.
NON-CURRENT

LIABILITIES

Also referred to as long-term liabilities, this category encompasses debts or obligations that your company must repay in over a year’s time. For example, non-current liabilities would include things like business loans, deferred tax liabilities, mortgages, and leases.
NON-OPERATING ASSETSFinally, non-operating assets are those that are not critical for a company to provide its product or service, but which are nevertheless essential to establish and run a business. For example, many intangible assets fall into this category, such as brands, trademarks, and patents.
NOTARIZETo formally complete a document by acknowledgement or oath.
NOTARY PUBLICA person who attests or certifies documents by the authority of the court.
NSENational Stock Exchange.
NYSENew York Stock Exchange.
OATHTo swear/affirm to the truth of a statement/document.
OPERATING ASSETSThese assets are those that are required for a business to complete its day-to-day functions. In other words, these are things that a company uses to produce its product or service and can include fixed and current assets, as well as tangible and intangible assets. Some of the most common items included in this category are cash, a company’s bank balance, inventory, and operating machinery.
OPTIONSThe contractual right but not the obligation, to buy and sell a specific amount of a given security at a previously fixed price or at a priced fixed at a designated future date.
ORDERA written direction of a court or judge to do or refrain from doing certain acts.
OUT-OF-POCKET-

EXPENSES

Expenses incurred by a professional carrying out duties on behalf of a client that are to be reimbursed by the client in addition to any fee payable.
OVERDRAFTAn amount, which may be drawn from a current account in excess of the balance available. It is a revolving credit negotiated beforehand and unlike a loan, interest is payable on amount used. The banker holds lien on securities offered during the use of the facility.
OVERHEADSThese are the indirect expenses incurred in the production of goods and cannot be put under a specific heading. They represent the difference between the prime costs covering wages plus material and the total cost of a product.
PATENTA right or privilege granted by law to an inventor also called a patentee, to enjoy the fruits of his invention for a specified period.
PAYEEA person to whom the amount is payable or in whose favour the Bill of Exchange is drawn.
PAY-IN SLIPA form filled up to deposit cash or cheque in a bank. The account holder retains the counterfoil. For bulk users, they may be bound in a Pay-in- Book.
PERJURYMaking false statements under oath.
PERQUISITESome benefit which is attached to an employment apart from the wages or salary paid.
PERSONAL GUARANTEEIf you’re seeking financing for a very new business and don’t have a high value asset to offer as collateral, you may be asked by the lender to sign a statement of personal guarantee. In effect, this statement affirms that you as an individual will act as guarantor for the business’s debt, making you personally liable for the balance of the loan even in the event that your business fails.
PETITIONA formal written request to a court, which starts a special proceeding. In juvenile court, the legal document which specifies the complaint against the juvenile and/or family; it includes the name, age and address of the minor and his/her guardian, as well as the statutory grounds and facts upon which the request for the court intervention is based.
PETITIONERAnother word for plaintiff, the person starting the lawsuit.
PETTY CASHA small amount of cash kept to cover day-to-day trivial or miscellaneous expenses.
PIGOperators who get killed by the speculators.
PLACINGA prior arrangement to place or sell shares to select investors such as financial institutions.
PLAINTIFFThe person who sues or starts a civil case, also called the petitioner or the complainant.
PLEAAn accused persons answer to a criminal charge. For example: not guilty; guilty; no contest.
PLEA BARGAINThe agreement a defendant makes with the prosecutor to avoid a trial. Usually involves pleading guilty to lesser charges in exchange for a lighter sentence.
PLEADINGSThe court documents filed with the court by the parties in a civil or criminal case. For example: motion to dismiss; motion for modification.
POLICYA comprehensive document issued by the insurer to the insured setting out detailed terms and conditions governing the cover. It is common to spell out the risks, sum assured, premium payable and the date of renewal or maturity. Once issued a policy is not cancelled.
Changes may be made through endorsements.
PORTFOLIOA list of securities owned by a person or an institution.
POST-DATETo affix a future date while executing a document or issuing a Bill of Exchange. Such an instrument becomes valid or payable only on the date mentioned. Conversely, a document may be antedated i.e carry an earlier date.
PRICE BANDThe limits within which the price of a security is allowed to fluctuate.
PRICE RIGGINGIt is the collective effort of bulls or bears to manipulate the price of a security without any regard for fundamentals of the company.
PRINCIPAL(1) The sum of money lent on which interest is being paid. (2) The party whom an agent represents.
PROPRIETORA person who owns or has a share in the ownership of a business.
PROSECUTETo carry on a case or judicial proceeding. To proceed against a person criminally.
PROSECUTORAlso called the state’s attorney. Represents the state in a criminal case against a defendant.
PROSPECTUSA document issued by a company inviting subscription to the public issue of its securities. It lists information for the use of investors and has to include the risk factors.
PROXYOne who acts on behalf of another, usually used to denote a person authorised by a member of a company to be present and vote on his behalf in a meeting.
QUORUMThe minimum number of members required to be present in order to transact business at a meeting.
QUOTATIONA firm statement of the total cost for which specified work will be undertaken.
QUOTE DRIVEN TRADINGIt refers to trading in which the brokers quote for buying and selling a security simultaneously.
RECESSIONA condition of the economy of a country under which business is conducted at a reduced level. It is also characterised by unemployment and falling prices.
RECONCILIATIONAn explanation of the difference between two figures which purport to express the same quantity.
RECORD DATEA date on which the records of a company are closed for the purpose of determining the stockholders to whom dividends, proxies, rights, etc. are to be sent.
REMITTANCEAn amount of money sent by one person to another, usually by post.
REPO RATERepo Rate or the Repurchase Rate is the rate at which a bank borrows money from the Reserve Bank of India (RBI). The bank pledges or sells government securities to the RBI for the same.

Also, these loans are usually for a period of up to two weeks. Hence, it refers to short-term loans. It is different from the Bank Rate with respect to the tenure of the loan.

RESERVEAn amount set aside out of profits or surpluses to meet contingencies.
RESERVE PRICEThe minimum price set in advance, that is acceptable to the auctioneer, so as to ensure that the object for sale will not be sold at too low a value.
RETAIL TRADEThe sale of goods to the final consumer.
RETAINED EARNINGSJust like it sounds, this term represents any profits earned that are retained in the business. This can also be referred to as bootstrapping.
RETROSPECTIVETaking effect as though it had occurred at an earlier date.
REVERSE REPO RATEWhen banks have surplus funds and they deposit them with the RBI for short periods, the RBI offers them a Reverse Repo Rate.
REVOLVING CREDITThe facility to borrow money up to a certain specified amount and to replace one borrowing that has been paid off with another so long as the overall limit is not exceeded.
RIGGED MARKETManipulation of share prices to attract buyers and sellers to the rigger’s advantage.
ROYALTYPayment made to the owner of a property for permission to use it.
RUMMAGINGA thorough search of a ship by custom officers to detect contraband or undeclared dutiable cargo.
SAFTASouth Asian Free Trade Area. It is one of the aims of SAARC group of countries.
SALVAGERecovering items from a site of destruction.
SAMPLINGA method of drawing conclusions about the whole by examining portions of it selected at random.
SCAMA fraudulent activity where usually small sums of money is obtained from a large number of persons, so that the activity is not detected.
SEBISecurities and Exchange Board of India.
SECURED LOANMany lenders will require some form of security when loaning money. When this happens, this business finance term and definition is a secured loan. The asset being used as collateral for the loan is said to be “securing” the loan. In the event that your small business defaults on the loan, the lender can then claim the collateral and use its fair- market value to offset the unpaid balance.
SEGMENTAL REPORTINGReporting on the various segments of a business’s activity.
SET-OFFA claim of one party when adjusted against an amount payable to another, so that only the balance remains payable or the whole debt is paid off.
SETTLEMENTIt is the scrip-wise netting of trades by a broker at the end of the trading cycle.
SHAREA unit of capital in a limited company. Preference shares are entitled to a fixed rate of dividend. After their claim is exhausted, Equity shares become eligible to get returns. Bonus shares are allotted without any payment to existing shareholders out of accumulated profits. Rights shares are issued on pro rata basis and have to be paid for.
SHARE CERTIFICATEA certificate issued to shareholders in paper or physical form. Besides the names of the holders, it carries the certificate, folio and distinctive numbers. It is signed by an authorised signatory and carries the common seal of the company.
SHAREHOLDERA person holding shares of a company. His rights include an invitation to attend and vote in Annual General Meetings, to receive a copy of audited results and receive dividend whenever declared.
SIBSecurities and Investments Board of UK.
SPLITTINGSub-division of a share of large denomination into shares of smaller denominations. Also means sub- division of holdings. The opposite process of combining shares of a small denominations into one of higher denomination is called consolidation.
SPOTSpot Cash means payment is due immediately. Spot Price indicates the price on as is where is basis. Spot Sale promises an instant delivery. Spot Trading implies delivery and payment of shares on the day of purchase or the next. Spot Delivery implies delivery and payment on the same day of the contract or the day following the day of the contract.
STAG(1) An applicant, for a new issue of shares, who hopes to sell the shares on allotment at a profit once trading commences in the secondary market;(2) A speculator who buys and sells stocks rapidly for fast profits.
STAMP DUTYThe ad valorem duty paid, evidenced by the affixing of revenue stamps on the instrument, to give legal effect to the same. For e.g. for transfer of shares.
STANDING ORDERAn instruction, which remains in force till withdrawn. It is useful to order routine and regular payments such as to an insurance company.
STATUTORY BOOKSRecords mandatory to be maintained under some law, such as those relating to charges, members, minute book for directors and shareholders’ meetings etc.
STOCK EXCHANGEAn organised market for the sale and purchase of securities. In India stock exchages are regulated by the Securities & Exchange Board of India. The movement in prices of select active scripts in reflected in Sensex or sensitive index in terms of points. Trading in major exchanges is Screen- based these days where buying & selling is done online. Matching of trades is done on computers installed in Stock Exchanges.
STOP TRANSFERIt is an instruction given by an account holder to his banker not to encash any payment for cheque/ demand draft from his account in case of loss, theft etc. of the same.
SUB JUDICEA matter pending decision by a Court is called sub judice. Parties to such a matter should not to do anything that would affect the outcome of the case.
SUBROGATIONThe legal principle that entitles an insured only the actual loss sustained in cases of pure indemnity.
SUMMONSA legal paper that is used to start a civil case and get jurisdiction over a party.
SUO MOTUThe Court may take action on its own when facts requiring legal intervention reach its notice. The Court is then said to be acting suomoto.
SWAPA financial transaction which exploits arbitrage opportunities between markets and in which two counter parties agree to exchange streams of payments over time according to a predetermined rule.
TAKEOVERThe acquisition of control of a company by another company achieved by the purchase of the majority of its shares.
TANGIBLE ASSETSAs the name implies, tangible assets are those assets that you can see and touch. This can include items that may also be referred to as current or fixed assets. For instance, cash — a current asset — is a tangible asset because it’s something you can physically touch. Most fixed assets are also tangible assets for the same reason. Land, real estate, machinery, equipment, and furniture are, after all, things you can see and touch.
TARIFFA list of applicable rates of duty under excise or customs.
TAX HOLIDAYA period of time established under statute, during which a business is not required to pay tax on its earnings.
TAX LIENIf your business fails to pay taxes owed to the designated government entity, namely the IRS, you may find your assets seized by the claim of a tax lien. The government can not only seize your assets for liquidation to resolve the tax debt, but they can also charge you penalties on the amount you own.
TENDERUsually an offer to provide goods or services at mentioned prices and understated conditions in response to a notice published in a newspaper. The sealed bids are opened and contract awarded to the lowest bidder.
TERM LOANThese are debt financing tools used to raise needed funds for your small business. Term loans provide the business with a lump sum of cash up front in exchange for a promise to repay the principal and interest at specified intervals over a set period of time. These are typically longer term, one-time loans for start-up expenses or costs for established business expansion.
TESTIMONIALA certificate issued by a responsible person to an individual about his conduct, ability, qualifications or credit.
TITLELegal recognition of the ownership of property, usually proven by a document.
TORTA civil injury or wrong to someone else, or their property.
TQMTotal Quality Management.
TRADE DISCOUNTSA discount given by one business to another which is making a purchase for resale to ultimate customers thereby enabling the buyers to earn profits. Sellers may adjust trade discounts to counter price fluctuations without having to change the catalogue prices.
TRADEMARKA distinctive mark or sign or symbol protected by law and placed on goods to identify the manufacturer.
TRAITelecom Regulatory Authority of India.

TRANSMISSIONIt is the process of transferring the ownership of securities after the death of the holder to the legal heirs.

TREASURY BILLSA short term bearer discount security issued by Governments as a means of financing their cash requirements. Treasury Bills play an important role in the local money market because most banks are required to hold them as part of their reserve requirements and because central bank open market operations undertaken in the process of implementing monetary policy are usually conducted in the treasury bill market.
TRESPASSTo enter someone’s land or property without their permission. It is an offence which is punishable in law.
TRUSTEEA person who holds property in trust for another for the use or benefit of another.
TURNOVERThe total value of goods and services sold or provided in a given period, usually during a year by a trading organisation.
UNDERWRITEROne who undertakes in return for a commission to purchase shares offered to public and not subscribed for, up to an agreed number.
UNSECURED LOANSLoans that are not backed by collateral are called unsecured loans. These types of loans represent a higher risk for the lender, so you can expect to pay higher interest rates and have shorter repayment time frames. Credit cards are an excellent example of unsecured loans that are a good option for small business funding when combined with other financing options.
USURYThe unlawful practice of lending money at an exorbitant rate of interest. This occurs usually when the borrower is in desperate need of money and not in a good position to negotiate.
VAKALATHNAMADocument by which an advocate is authorized to represent a party in court.
VANILLA ISSUEA straight fixed rate issue which has terms and conditions usually accepted as being conventional to a particular securities market.
VATValue Added Tax, a tax levied at specific rates on the selling price of goods at each stage of production and distribution so that only the value added at each stage is taxed and thereby cascading tax is avoided.
VENTURE CAPITALCapital invested in a business on the basis that the investor receives a share in the outcome of the enterprise rather than an agreed fixed rate of return.
VISAIt is an endorsement made on the passport of the traveller by the envoy of the country to which he intends to travel.
VOUCHERA document or some such evidence of some transaction, usually payment of money.
WAGESRemuneration paid to manual workers.
WARRANTA tradable instrument giving the holder the right to buy from the issuer a fixed income security or equity stock under specified conditions after some period of time.
WARRANTYA contractual obligation, which entitles the injured party to seek damages but not to cancel the contract.
WATCHDOGA general term applied to a person or group appointed or set up to safeguard the interests of a particular group.
WINDING UPLiquidating an asset with a view to distributing the receipts among creditors. It is the process that brings to a conclusion the life of a company.
WINDOW DRESSINGA manoeuvre engaged in by companies, banks, mutual funds etc., at the end of the accounting period in order to impress stock holders who will be receiving the report showing that funds are better managed and invested than what might have been drawn up.
WOLFSpeculators who make a kill in the market.
WORKING CAPITALNot to be confused with fixed capital, working capital is another business finance 101 term. It consists of the financial resources necessary for maintaining the day-to-day operation of the business. Working capital, by definition, is the business’s cash on hand or instruments that you can convert to cash quickly.
WRITA document issued by the court directing the respondent to do or not to do some specified act.
WRIT & WRIT PETITIONA writ is a direction that the Court issues, which is to be obeyed by the authority/person to whom it is issued. A petition seeking issuance of a writ is a writ petition.
WRITE OFFIt is to extinguish or cancel a debt, treating it as if it has been paid by debiting it from the profit and loss account.
ZERO COUPON BONDA bond that pays no interest while the investor holds it. It is sold originally at a substantial discount from its eventual maturity value, paying the investor its full face value when it comes due, with the difference between what he paid initially and what he finally collected representing the interest he would have received over the years it was held.

 

Sample Question

Here you are provided with the definition for the word and you need to write the word / term in the space provided.

A corporation’s first offer to sell stock to the public.
A person or company who occupies the top spot in politics or an industry.
The increasingly complex worldwide interchange of goods, services, money and people.
To rescue from financial difficulty.
The person who buys the rights to use a company’s name and sell/rent its products in a certain area.
Analysis of a country’s economy as a whole.
A detailed list or record of things in one’s possession.
Total sales for a period, before customer discounts and returns have been deducted.
That part of the economy that deals with finance.
Where foreign companies invest in a country by buying physical assets (such as plant and machinery).
A situation where the ratio of output to input is high.
Inputs that are essential to a production process.

Along With this blog, Read Our Other Articles Related to CSEET Test

ICSI CSEET Test – May 2020 (Application From,Eligibility, Syllabus and FAQS etc)

ICSI CSEET Registration Process-May 2020

ICSI CSEET Syllabus May 2020

Best Resources For May 2020 CSEET

Best Faculty CSEET Pendrive classes –

Most dedicated CSEET Telegram channel 

Popular CSEET  YouTube Channel 

To talk to a counselor directly give a missed call at 9980100288.

 

 

Leave a comment

Your email address will not be published. Required fields are marked *