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Finanacemade Easy

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Submitted By samreenk
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FINANCIAL TERMS MADE EASY
BY ADEEL AND MOHSIN

A
Accrual -Estimates of costs incurred but not yet invoiced. They are charged to the Profit and Loss Account and will also appear as liabilities in the Balance Sheet.
Examples:
A business records its utility bills as soon as it receives them and not when they are paid, because the service has already been used. The company ignored the date when the payment will be made.
An airline sells its tickets days or even weeks before the flight is made, but it does not record the payments as revenue because the flight, the event on which the revenue is based has not occurred yet.
Acquisition - When one company purchases a majority interest in the acquired.

Ad valorem -A tax based on the assessed value of real estate or asset. Ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenue for state and municipal governments.

Explanation:
The phrase ad valorem is Latin for "according to value". In the case of municipal property taxes, property owners have their property assessed on a periodic basis by a public tax assessor.

Aging schedule - Table that classifies accounts payable or accounts receivable according to their dates. It helps in analyzing which payments are behind their due date, and by how many days.

American depository receipt-A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction.
Explanation: This is an excellent way to buy shares in a foreign company while realizing any dividends and capital gains in U.S. dollars. However, ADRs do not

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