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What Are Shares?

Shares, just like the name, signifies the ownership of a business. A business needs money to start. In order to raise enough money to start a business, the initiator calls up a meeting among the people who want to take part in the business. They put their money together as their contributions to the business. And then they will get the receipts that show their investment makes them, the investors, part-owners of the company.

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What Is Government Accounting?

Public sector entities in the United States require their own system for accounting. These will be used in all state, federal, and local agencies. Government accounting has its own principles and guidelines. These are provided by the Federal Accounting Standards Advisory Board (FASAB) or the Governmental Accounting Standards Board (GASB). Federal agencies will rely on the guidelines provided by the FASAB while other public agencies will use GASB guidelines.

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What is a Slush Fund?

The words ‘slush fund’ have developed a very negative connotation over the years. This is largely due to the fact that such money is often associated with breaking the law. There have been plenty of sensational media stories where corrupt politicians or business people have had money hidden away in their slush fund. Although this type of set aside money is often viewed negatively there are actually some very legitimate reasons for why a business or organization might have such a fund. Read the rest of this entry »

What is a Notional Amount?

Different financial instruments will have a face value. This is referred to as a notional amount or notional value. The word ‘notional’ means that something is just an idea and not a physical reality. The reason why we talk about a notional amount on a financial instrument is that it is an amount of money that doesn’t actually change hands. This numerical value is still important though, especially when it comes to calculating any payments that need to be made on a bond, future, or other derivative instrument.

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What is a Cashbook?

These days most of us are more aware of the need to track our income and expenditure. Bookkeeping is something that most of us will associate with businesses, but it is also something that can benefit personal money management. A good way to do this is to have a cashbook. There is something that anyone can learn to use and it can be very beneficial when it comes to managing personal finance.

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What is a Cost Structure?

When a business manufactures a product or creates a service there will always be certain costs involved. The nature of these costs will depend on the exact product or service being offered. Cost structure refers to the way that all the different costs are distributed throughout the process of creating a good or service. It will include such things as paying for the resources needed to make the product and other costs such as labor and electricity. The money spent marketing and delivering the item will also be included in this too.

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What is a Tax Loss Carryforward?

Tax loss carryforward is used in accounting as a way to use financial losses within a business year as a later tax liability. This deduction from tax can be used up to seven years after the year when the loss occurred. This means that should the company experience a good year in the future they can use this tax liability to reduce the amount they have to pay.

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What is Transfer Pricing?

When goods or services are transferred within an organization there needs to be a way of tracking this for accounting purposes. Transfer pricing is a method by which resources can be transferred between different divisions or subdivisions of an organization. This transfer price can also apply to any subsidiaries of the business. The purpose of doing this is to optimize the performance of the organization as a whole and to determine how each division of the company is performing. It makes it possible to calculate each division’s profits and losses separately.

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