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Showing posts with label Executive. Show all posts
Showing posts with label Executive. Show all posts

Financial Terminology for Drawing and Disbursing Officers and Financial Executives (Part-2)

Financial Terminology for Drawing and

Disbursing Officers and Financial Executives (Part-2)

-Dr.Lalit Kumar Setia*

Face Value

The nominal value of stocks, shares, bonds, certificate etc.  This value excludes premium or discount.

Fictitious Assets

Those assets which appear in the balance sheet but do not represent value that can be realized e.g. Preliminary expenses not written off.  They arise out of genuine transactions.

Final Accounts

The set of financial statements produced in the form of Profit and Loss Account and Balance Sheet at the end of the Accounting period.

Finance

The raising or providing of money for public or commercial undertakings.

Financial Accounting

The systematic recording in monetary terms of information about a firm, primarily for creditors, shareholders and taxation authorities.  It is the giving or presenting of final results in the form of Profit and Loss account and Balance Sheet of the firm.

Financial  Management

A subject that covers the managerial aspect of funds in the sense of resources and disbursements.  It includes decision making processes on how best to utilize available funds; how to cut costs and increase revenues.

Financial Ratios

A ratio used to analyse the performance of an organization by finding a relationship between two items of accounts.

First In First Out (FIFO)

The stock which is acquired earliest is assumed to be used first, the stock acquired latest is assumed to be still on hand. A method of pricing materials which has the effect of charging less to profit and loss account and higher valuation in the balance sheet than other methods of stock pricing.

Fiscal Year

A period covered by the Budget, as used in the United States. A period of twelve consecutive months used as an accounting period.

Fixed Assets

Assets which have long term use such as furniture, machinery, building etc. and which are acquired to assist the production process and are not used for trading i.e. to make a  profit by reselling them.

Fixed Cost

A cost which for a given period of time and range of activity called the relevant range does not change in total but becomes progressively smaller on a per unit basis as volume increases.

Flexible Budget

A budget that provides budgeted amounts for all levels of production within the relevant range-a budget which can be automatically geared to change in the levels of volume or output.

Freehold

An ownership of land where the owner or holder of the land has free and absolute possession for all times to come without any encumbrances.

Free Trade

International trade without tariffs, quotas or other artificial restrictions.

Fund

Sum of Money.  Income set aside for a particular purpose.  Stock or capital.  Government stock and public securities.

Futures

A means by which merchants or other large buyers could hedge against price fluctuations of a commodity in which they deal.

Gain 

A profit which is earned as a result of some activity other than from a regular business or trade.

Goodwill

The total purchase price of assets acquired in lump-sum purchase that exceeds the total of the amounts that can be justifiably assigned to the individual assets.  Intangible assets of a firm established by the excess of the price paid for the going concern over its book value.
A benefit of an established firm over new firms in terms of the likelihood of repeat business from its customers.
Value of a business in excess of the realizable value of its tangible assets.  It can arise when consolidated accounts are prepared and there is a surplus of the purchase price of share capital in the subsidiary company above their underlying net asset value.

Government Securities

Securities issued by the Government which may be short-term, medium-term or long-term.  They are usually issued in the form of bonds or treasury bills.  They are also termed as funded stocks.  Government stocks are known as gilt-edged by the British Government.

Income

Gain, interest or revenue resulting from employment, business activity etc.

Incentives


A system of wage payment which offers an inducement in the form of a bonus to encourage workers to maintain a high level of output.


*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. 

Financial Terminology for Drawing and Disbursing Officers

Financial Terminology for Drawing and

Disbursing Officers


-Dr. Lalit Kumar Setia*

In Government or Public sector, Drawing and Disbursing Officers (DDOs) perform financial tasks including their ordinary administrative activities. The charge of DDOs is a very genuine responsibility to verify activities in relation with the set rules. The DDOs should have knowledge of Service rules regarding Dismissal, Removal and Suspension of employees, Punishment and Appeal rules, Conduct rules, Leave rules etc. At their workspace, the rules and regulations are changed from time to time, therefore it is necessary to update according to the new environment. It is identified that they should have knowledge of all financial and administrative tasks to deal their matters easily and efficiently. Normally they remained unaware about the modified rules and their working activities are adversely affected due to this awareness. This training programme is especially designed and organized to fulfill their requirements. This is a single five days training programme having sessions on topics in relations with the duties and responsibilities of DDOs. 
The financial reforms are also taking place in the government sector to improve the efficiency and speed of accounting activities in government offices. The activities will be changed to a great extent after implementation of Accrual Base Accounting System. The aim of the course is to enable and improve the capability of the DDOs in understanding their role and duties for ensuring transparency and accountability in the government departments.
In Government Sector, the Drawing and Disbursing Officer is the one of the most responsible person. His duties are governed by rules and rules comprise terminology. Let us have an exposure to that terminology:

Financial Terminology

In the present day dynamic scenario, everyone wants to have some knowledge, if not an intimate knowledge of the various subjects and areas. Today, Financial knowledge is required everywhere to manage the organizational tasks with the financial perspective. For understanding finance, it is required to understand its key terms firstly. This chapter covers the meanings of many common and relevant terms of the finance, especially for the managerial employees having no much financial background.

Account:

In financial terms account means any of the following : (1) Entries in a ledger (q.v.) such as capital account, cash account, building account etc. which was historically a part of the ledger; (ii) A statement or bill requiring payment for goods or services; (iii) A statement of stewardship such as the financial accounts of Public Companies to their shareholders, liquidator’s or executor’s accounts etc.

Accountability:

A responsibility which makes or obligates a person to explain his actions by answering the whys and wherefores involving financial matters to others. For example, the directors of a public company have accountability to their shareholders at the annual general meetings and therefore, have to answer all questions put out to them by the shareholders.

Accountant:

A professional keeper and inspector of accounts (Oxford English Dictionary). A person qualified in book-keeping and cognate subjects.  One who is concerned with the making up of or analysis of accounts and with their use by organizations.

Accountant and Comptroller General:

The head of the accounts department of the Inland Revenue or customs and excise.

Accumulated Depreciation:

The total amount of depreciation provided on a fixed asset w.e.f. the date of purchase to the date when such amount has to be calculated. The figure is therefore, a sum total of several number of years’ depreciation. The company law makes it obligatory for a company to show its fixed assets at cost or a value after deducting the accumulated depreciation.  Normally a separate account is prepared for accumulated depreciation.

Next: Continued.....

*Copyright © 2018 Dr. Lalit Kumar. All rights reserved. 

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