Important Financial Terms For Viva Preparation

Finance Finance describes the management, creation and study of money, banking, credit,investments, assets and liabilities that make up financial systems, as well as the study of those financial instruments

Private Finance includes the Individual, Firms, Business or Corporate Financial activities to meet the requirements.

Wealth maximization is known as value maximization or net present worth maximization.

Profit maximization is called as cashing per share maximization. It leads to maximize the business operation for profit maximization

Financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of financial aspects of a business firm. It may show a position at a moment of time as in the case of a balance-sheet or may reveal a service of activities over a given period of time, as in the case of an income statement.

Income StatementIncome statement is also called as profit and loss account, which reflects the operational position of the firm during a particular period. Normally it consists of one accounting year. It determines the entire operational performance of the concern like total revenue generated and expenses incurred for earning that revenue

Position StatementPosition statement is also called as balance sheet, which reflects the financial position of thefirm at the end of the financial year.Position statement helps to ascertain and understand the total assets, liabilities and capitalof the firm.

Statement of Changes in Owner’s EquityIt is also called as statement of retained earnings. This statement provides information about the changes or position of owner’s equity in the company.

Statement of Changes in Financial PositionIncome statement and position statement shows only about the position of the finance, hence it can’t measure the actual position of the financial statement. Statement of changes in financial position helps to understand the changes in financial position from one period to another period.

Public Finance concerns with revenue and disbursement of Government’s Financial matters.