Know Thy Meaning - 6
Asset
Definitions (2)
1. Something valuable that an entity owns, benefits from, or has use of, in generating income.
2. Accounting: Something that an entity has acquired or purchased, and that has money value (its cost, book value, market value, or residual value). An asset can be (1) something physical, such as cash, machinery, inventory, land and building, (2) an enforceable claim against others, such as accounts receivable, (3) right, such as copyright, patent, trademark, or (4) an assumption, such as goodwill.
Assets shown on their owner's balance sheet are usually classified according to the ease with which they can be converted into cash.
Net Present
Value (NPV)
Definition
The difference between the present value of the future cash flows from an investment and the amount of investment. Present value of the expected cash flows is computed by discounting them at the required rate of return.
For example, an investment of $1,000 today at 10 percent will yield $1,100 at the end of the year; therefore, the present value of $1,100 at the desired rate of return (10 percent) is $1,000. The amount of investment ($1,000 in this example) is deducted from this figure to arrive at net present value which here is zero ($1,000-$1,000). A zero net present value means the project repays original investment plus the required rate of return. A positive net present value means a better return, and a negative net present value means a worse return, than the return from zero net present value. It is one of the two discounted cash flow techniques (the other is internal rate of return) used in comparative appraisal of investment proposals where the flow of income varies over time.
Fixed cost
Definition
A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages.
While in practice, all costs vary over time and no cost is a purely fixed cost, the concept of fixed costs is necessary in short term cost accounting. Organizations with high fixed costs are significantly different from those with high variable costs. This difference affects the financial structure of the organization as well as its pricing and profits. The breakeven point in such organizations (in comparison with high variable cost organizations) is typically at a much higher level of output, and their marginal profit (rate of contribution) is also much higher.
Financial leverage
Definition
The use of borrowed money to increase production volume, and thus sales and earnings. It is measured as the ratio of total debt to total assets. The greater the amount of debt, the greater the financial leverage.
Since interest is a fixed cost (which can be written off against revenue) a loan allows an organization to generate more earnings without a corresponding increase in the equity capital requiring increased dividend payments (which cannot be written off against the earnings). However, while high leverage may be beneficial in boom periods, it may cause serious cash flow problems in recessionary periods because there might not be enough sales revenue to cover the interest payments. Called gearing in UK. See also investment leverage and operating leverage.
Problem
Definition
A perceived gap between the existing state and a desired state, or a deviation from a norm, standard, or status quo.
Although many problems turn out to have several solutions (the means to close the gap or correct the deviation), difficulties arise where such means are either not obvious or are not immediately available.
SAP
Definition
A German software company whose products allow businesses to track customer and business interactions. SAP is especially well-known for its Enterprise Resource Planning (ERP) and data management programs. SAP is an acronym for Systems, Applications and Products.
Revenue
Definition
The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted. Revenue is shown usually as the top item in an income (profit and loss) statement from which all charges, costs, and expenses are subtracted to arrive at net income. Also called sales, or (in the UK) turnover.
Pro forma invoice
Definition
An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. It notes the kind and quantity of goods, their value, and other important information such as weight and transportation charges. Pro forma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.
Accounting Concepts
Definition
Rules of accounting that should be followed in preparation of all accounts and financial statements. The four fundamental concepts are
(1) Accruals concept: revenue and expenses are recorded when they occur and not when the cash is received or paid out;
(2) Consistency concept: once an accounting method has been chosen, that method should be used unless there is a sound reason to do otherwise;
(3) Going concern: the business entity for which accounts are being prepared is in good condition and will continue to be in business in the foreseeable future;
(4) Prudence concept (also conservation concept): revenue and profits are included in the balance sheet only when they are realized (or there is reasonable 'certainty' of realizing them) but liabilities are included when there is reasonable 'possibility' of incurring them.
Other concepts include:
(5) Accounting equation: total assets equal total liabilities plus owners' equity;
(6) Accounting period: financial records pertaining only to a specific period are to be considered in preparing accounts for that period;
(7) Cost basis: asset value recorded in the account books should be the actual cost paid, and not the asset's current market value;
(8) Entity: accounting records reflect the financial activities of a specific business or organization, not of its owners or employees;
(9) Full disclosure: financial statements and their notes should contain all relevant data;
(10) Lower of cost or market value: inventory is valued either at cost or the market value (whichever is lower);
(11) Maintenance of capital: profit can be realized only after capital of the firm has been restored to its original level, or is maintained at a predetermined level;
(12) Matching: transactions affecting both revenues and expenses should be recognized in the same accounting period;
(13) Materiality: minor events may be ignored, but the major ones should be fully disclosed;
(14) Money measurement: the accounting process records only activities that can be expressed in monetary terms (with some exceptions);
(15) Objectivity: financial statements should be based only on verifiable evidence, including an audit trail;
(16) Realization: any change in the market value of an asset or liability is not recognized as a profit or loss until the asset is sold or the liability is paid off;
(17) Unit of measurement: financial data should be recorded with a common unit of measure (dollar, pound sterling, yen, etc.).
Also called accounting conventions, accounting postulates, or accounting principles.
Saturday 27 April 2013
Thursday 25 April 2013
The Top 5 Inventions of All Times
The Top 5 Inventions of All Time
While some people are lucky enough to discover the “next” penicillin,
most inventions come from those who’ve dedicated their lives, or at least a
significant portion of them, to understanding and expertise in a particular
field. As you’ll see in the following list, the top 5 inventions of all time
are no accident.
Admittedly, there are countless inventions that have had a similarly
notable impact – the battery, the camera, GPS – some of which are even
incorporated into the below-mentioned inventions. But when considering the
developmental impacts resulting from each, the following five inventions are
hard to beat.
1. The Internet
Invented in 1969 (and not by Al Gore), the World Wide Web grew from just
four users in 1969 to 50,000 in 1988. From there, a million in 1991 and 500
million by 2001. Today there are over 1.2 billion people (roughly 19 percent of
the world) connected online. And whether it’s used for social media, shopping
or to find information, the Internet has forever changed the landscape of the world,
arguably making it considerably smaller in the process.
2. The Barcode
First invented by a student in the early 1950s, barcodes were originally
intended to provide a kind of visual Morse code. Retailers were initially slow
to adopt the technology, which at the time was somewhat unreliable. But that
changed in the early 1970s when the same student, Norman Woodland, devised the
Universal Product Code while working for IBM. Since then, the familiar black stripes have
appeared on everything from orange juice to a pair of designer sunglasses,
revolutionizing sales and inventory management in the space of less than one
square inch.
3. Internal Combustion Engine
The significance of the internal combustion engine may have fallen from
grace in the hybrid, fuel-efficient world of today. But with its first rumbling
in 1859, its significance has left a permanent mark on the development and
modernization of society, in particular farming and manufacturing. Without the
internal combustion engine, we would not be able to drive, fly or travel by
train. We would not be able to build factories, sail across oceans or even cut
the grass in our front yards. Étienne Lenoir, a Belgian inventor, gets the
credit for producing the first working internal combustion engine. He then
converted it to a steam engine in 1859. At the time, it was capable of
producing a measly one horsepower and was almost inoperably inefficient. But
since then, manufacturers have continuously redefined the basic design,
creating the countless generations and billions of engines that have been built
since.
4. LASER
LASER – short for Light Amplification by Stimulated Emission of
Radiation – is used in everything from home blu ray players to advanced
weaponry. Albert Einstein was the first one to initiate its development in 1917
when he proposed that atoms could be stimulated to emit photons in a single
direction. Three decades later, this phenomenon was first observed. And in
1960, Theodore Maiman, a physicist, built the first working laser. Maiman’s
laser was based around a ruby crystal that was said to emit light “brighter
than the centre of the sun.”
5. Mobile Phone
There are now more than two billion mobile phones in the world. And in
Europe, the number of mobile phones outnumbers the people living there (in some
countries 2 to 1!). The first device was introduced by Bell Laboratories in
Missouri in 1947. Since then, similar to any other device that has evolved into
modern life, the cell phone has undergone widespread refinements, shrinking in
size while increasing in power, range and complexity. Today, everything from
modern business negotiations to those long distance calls home at Thanksgiving
are made affordable with the technology of the mobile phone.
Why are we moving to a new cheque system?
The following article is mainly for Indian viewers.
Why are we moving to a new cheque system?
|
Considered
to be a major milestone in the history of Indian Banking, Cheque Truncation
System (CTS) aims to make cheque clearance more efficient and reduce the
clearance time of cheques to one day, thereby trimming down the floating time
considerably. India processes as many as 1.2 billion cheques annually and
therefore, the implementation of this system would drastically cut down the
waiting period involved.
The
system will be implemented nationwide from July 1, 2013.
How does it work?
An
online image-based cheque clearing system, the collecting bank branch would deploy
scanned images along with the magnetic ink character (MICR) of the cheque which
will be sent out electronically using their Capture system, removing the need
for physical / manual transfer of cheques. The captured images and the data is
then signed and encrypted and sent to the Clearing house or the Central
processing location and thereafter forwarded to the drawee or paying bank. This
helps speed up the cheque collection process that eventually helps provide
better and faster customer service.
Key features of Cheque
Truncation System
a) User friendly graphic user interface
b) Automated coding and endorsing of
cheques
c) Encryption of data file before transmission
to the clearing house or the service branch
d) Employs a unique transaction follower
process to confirm the status of the cheques
e) Improved and efficient settlement and
prevention of fraud
f) Equipped with enhanced archival procedure
that stores images and data facilitating report generation along with future
enquiry
g) Alerts RMs in case of return of
cheques due to insufficient funds
Impact of CTS on Customers
Handling of EMIs with the introduction
of CTS
In
cases where customers have issued post-dated cheques (PDC) for payment of
monthly instalments towards a running loan, they would need to issue fresh
cheques to the bank or service provider as per the new directive on CTS by the
RBI. The replacement of these cheques needs to be done latest by 30th
June, 2013 and is applicable on banks and NBFCs.
Encashment of Old
Cheques
If
you have an old cheque with you, the same should be encashed by June 30, 2013.
The RBI mandate states that payments for such cheques will be honoured only
till then.
Banks
need to issue the new type of CTS-compliant cheque books with the prescribed
features to all their customers latest by June 30, 2013. Customers may need to
surrender their old cheque books or cancel them and show the proof of
cancellation. Some banks are contemplating advising their customers to use the
old cheque books for withdrawing cash and other transactions within the branch
such as transfer from one account to another etc. No replacement fee will be
charged by the bank for issuing new cheque books.
Apart
from the above aspects, the system does not, in any way, affect the way things
function for the customer. They would continue using cheques as they do currently;
however, cheques that have been altered or modified will not be permissible
under the new system. The other precautions that need to be taken while issuing
or writing a cheque are:
a) Ensure that all details are clear and
readable, using black or blue ink
b) Write the name of the payee, amount and
the date and sign the cheque correctly
c) In the event of usng seals on the
cheque, ensure that they are imprinted in a manner that they do not mask or
hide the other important fields of the cheque
Benefits of CTS for
customers
There
are many benefits for the customer in the cheque truncated system.
Clearance
cycle gets shortened. With the implementation of this system, the physical or
manual movement of cheques would cease. The settlement process becomes quick, as
the cheques are being transmitted in electronic form. This facilitates
reduction in the clearance cycle.
The
fear of loss of cheques during transit from the collecting bank to the drawee
or payee bank is eliminated.
Limitations
of the current clearing system with respect to jurisdiction and geography are
eliminated. This enables integration and consolidation of several clearing
locations across various banks offering different service levels into one standard
clearing system applicable to the whole country.
CTS
helps reduce the scope for fraud significantly. Moreover, the electronic transmission
is quick and allows early detection of any alteration with respect to the
payee, amount or the issuer of the cheque. CTS prescribes minimum features under
‘CTS-2010 standards’ along with superior verification process that further facilitates
in the reduction of frauds.
The
operational efficiency of both the banks as well as the customer is enhanced
with the introduction of this system
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Wednesday 24 April 2013
Data Sufficiency - 1
Data Sufficiency - 1
Directions:
The questions below are followed by two statements “A” and “B’,
Choose (1) if the statement “A’ is alone sufficient to answer the question but statement “B” alone is not sufficient to answer the question.
Choose (2) if the statement “B’ is alone sufficient to answer the question but statement “A” alone is not sufficient to answer the question.
Choose (3) if both the statements are sufficient to answer the question but neither statement by itself is sufficient to answer the question.
Choose (4) if the both the statements even when taken together are not sufficient to answer the question.
Choose (5) if either statement “A” or statement “B” is sufficient to answer the question asked.
1. Is “Y” larger than 1
A : Y > 0
B : Y2 – 4 = 0
2. Is the integer “X” divisible by 3?
A : The last-digit in “X” is 3.
B : “X+5” is divisible by 6.
3. How much is Mohan’s weekly salary?
A : Mohan’s weekly salary is twice as much as Sohan’s weekly salary.
B : Sohan’s weekly salary is 40 % of the total of Ram’s & Mohan’s weekly salaries.
4. What markes have been obtained by Akshay?
A : Akshay’s marks are the average of marks of Vikram & Rohan.
B : Vikram obtained 80 marks and this is 33 % more than marks obtained by Rohan.
5. How many tons of cement will be needed for the foundation of an apartment
building?
A : The entire building will require 5000 tons of cement.
B : The volume of the cement needed for the foundation is 1000 cubic yards.
6. Is the side GF of the triangle GFD 5 inches long?
A : GD = FD
B : GD = 2 inches
7. A television set was originally priced at Rs 25000. What percent discount was given on its original price?
A : The Store has 5 of these television sets left.
B : If the store were to sell all of the remaining television sets, it would receive Rs 10,000 for them.
8. What is the cost of 2 kgs of apples ?
A : Ten apples weigh 2.1 kgs on the average.
B : Ten kilos of apples cost Rs 300.
9. A gold ring weighs 1 gram. The ring is not of pure gold, but is mixed with copper. What is the value of the metals in the ring?
A : Gold is worth Rs 350 per gram.
B : 50 % of the ring is due to copper.
10. Ramesh worked 42 hrs this week. How much did he earn ?
A : Ramesh works 35 hrs a week @ Rs 30 per hour.
B : Ramesh gets Rs 40 per hour for overtime work
11. City “X” has two libraries. Does the total no. of books in both the libraries exceed 18000?
A : One library has twice as many books as the other library
B : One library has 9000 books.
12. What is the width of the widest of 4 rivers?
A : The most narrow river is 240 yards across.
B : The widest river’s width is 4/5th of the narrow-river plus the average of the
remaining 2 rivers one of which has a width of 284 yards while the other is ¾ th of the widest river.
13. How many bees will be there in 2009?
A: No. of bees increases by 12.875 % every year.
B: The bees population in 2006 is 0.4 crores.
A: The value of the computer diminishes / depreciates year on year by 8.75 %
B: The same computer now costs Rs 4678.
15. A long thread of 4 mts is cut in to three smaller threads in natural numbers. Is it possible to determine the longest of these 3 pieces of threads?
A: First two – pieces of threads are of same length.
B: One-piece is 2 mts long.
Answers:
(1) 2 (2) 3 (3) 3 (4) 3 (5) 4 (6) 3 (7) 4 (8) 2 (9) 4 (10) 3
(11) 4 (12) 4 (13) 3 (14) 3 (15) 2
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Monday 22 April 2013
TCS Questions - 8
TCS
Questions – 8
1.
A
person is taking an objective type exam consisting of 30 questions. His score
is found to be more than 80 using the formula S = 30 + 4C – W ( where S denotes
the score obtained, C the number of correct answers and W the number of wrong
answers). If the score is little less still more than 80 then it would be
difficult to answer. How many correct questions he answered?
Answer: 16 correct questions.
It
is trial and error method. Since the score was observed to be more than 80 the
only possible answer could be 4C – W should equal 50 or little more. The only
possible value for C is 16 in which case each wrong answer gets one negative
mark. Any other figure for C would not get you the proper answer.
2.
A
plane goes from Chicago to Columbus and returns. The time of travel either way
is the same. It leaves Chicago at 06.44 hours local time and arrives in
Columbus at 08.49 hours local time. The plane leaves Columbus at 16.25 hours
local time and arrives in Chicago at 16.38 hours local time. What is the time
taken by the plane to travel either way?
Answer: 69 minutes.
The
plane left Chicago at 06.44 hours in the morning and returns at 16.38 hours in
the evening. Hence the plane was away from Chicago for 9 Hours 54 minutes.
The
plane reaches Columbus at 08.49 hours in the morning and leaves at 16.25 hours
in the evening. Thus the plane was at Columbus for 7 hours and 36 minutes.
Hence
the plane was air borne for 9.54 hours minus 7.36 hours.
That
is 2 hours and 18 minutes or 138 minutes. This is the total air borne time for
both the ways. Hence the time taken by
the plane to travel either way is 139/2 = 69 minutes.
3.
If 3y + x > 2 (i) and x + 2y ≤ 3 (ii) then
what can be said of the value of y?
Answer: y > -1
Let
us try to eliminate one of the variables in the above two equations. Take the
second equation and multiply the same by -1. We now have
-x
-2y ≤ - 3. Adding this with equation (i) we
get y > -1
4.
What
is the sum of all even integers between 99 and 301?
Answer: 20200
The
first and last even digits between 99 and 301 are 100 and 300. We have to find
the sum of
(100
+ 102 + 104 + 106 + ……….. + 300) this
can be written as
2
( 50+51+52+53+54+……..+150) there are 101 terms in this series. Ie ‘n’ terms
Hence
the sum is given by n/2 ( a+l) where a and l are the first and the last terms.
Thus
the sum of (50+51+52+…….+150) will be 101/2 * ( 50+150).
Hence
the answer to the question is
2 * 101/2 * 200 = 20200
5.
There
are 20 red, blue or green balls. If there are 7 green balls and the sum of red
and green balls are less than 13, then at most how many red balls are there?
Answer: 5 balls. (simple logic)
R
+ B+ G = 20. G = 7. G + R < 13 7 + R < 13 Hence R < 6 (the maximum value) Hence
the maximum value of R could only be 5.
6.
If
‘n’ is the sum of two consecutive odd integers and is less than 100, then what
is the maximum value that ‘n’ could take?
Answer: 96
Let
us have the two integers as (2n + 1) and
(2n – 1).
Now
from the question, we have (2n+1) + (2n-1) < 100
So,
4n < 100 . Hence the maximum value for n could be 24 as 96 is the only
maximum integer divisible by 4 that is less than 100.
7.
M,
N, O and P are different individuals. M is the daughter of N. N is the son of
O. O is the father of P. Among the following statements which one is true?
(a) M is the daughter of P
(b) If B is the daughter of N, then M and
B are sisters.
(c) If C is the grand-daughter of O, then
C and M are sisters.
(d) P and N are brothers.
Answer: (b) Simple logic. Draw a family tree and then
answer.
8.
There
are 10 stepping stones numbered 1 to 10. A fly jumps every minute four steps
from its previous position. From 2 it would go to 6th and from there
to the 10th. Since there are only 10 steps, from the 10th
it would come down to 4th step and so on. If the fly starts from
step No 1, then after one hour in which step it would be?
Answer: Step No 1.
A
simple reasoning question. After every 5 minutes the fly will be in the same
step from which it started. After 60 minutes (one hour), it will again be in
step no 1.
9.
What is the sum of the base 7 numbers 1234 and
6543 n base 7?
Answer: 11110.
In base 7 there is no number 7 since it starts
from 0,1,2,3,…6. Hence to write 7 we start from 10, for 8, 11 and so forth.
A
B
C D
We
shall write the numbers as
1 2 3 4
6
5 4 3
Now
the sum of these …4+3=7 Under base 7 the value is 10. We take 0 (1 is carried)
3+4=7
plus carried forward 1 total 8. The base value for this is 11.Keep 1 and carry
1
5+2=7
plus 1 carry total 8. Base value again is 11. Keep 1 and carry forward 1.
6+1=7
plus carry 1, total 8. Base value for 8 is 11. Thus the answer is
11110.
10. A, B, C, D go on a picnic. A and B
weigh themselves on a scale and are 132 kg. B and C weigh 130 kg. C and D weigh
102 kg and B and D weigh 116 kg. What is the weight of D?
Answer: 44 kg.
B
+ C = 130 kg B + D = 116 kg Eliminating B from these two,
We
get C – D = 14 kg. C + D = 102 kg. Adding
these two we get 2C = 118 and C=58
Substituting
the value of C, We get the weight of D
as 44 kg.
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Sunday 21 April 2013
Alternate Career Paths
This article though refers to possibilities in the
US and other developed countries, can also be modified suitably to Indian
conditions.
Alternative Career Paths that Will Help You Enjoy
Your Job Again
If you begin to realize that your chosen career is simply not all that
you hoped it’d be, don’t despair. There are several lesser known career paths
that dovetail nicely with your current work experience and education if you
know where to look.
Today we’re going to look at 5 variations of jobs which you may have never
considered. If you are looking to start a new career or simply switch to a
different position in the same field, then here are a few exciting alternative
career paths that you can look into.
1. Corporate Trainers
If your passion is teaching but would rather do without the unruly kids
and the temperamental teenagers, then working as a corporate trainer may just
be the job you are looking for.
You will be tasked as a corporate trainer to coach
professionals and educate them about specific skills, technologies and
protocols needed in order to adapt to a corporate environment. The pay is also
not that bad as you can earn as much as $55,000 yearly excluding bonuses.
2. Personal Finance Advisors
If you are good with numbers but tired of working in the cutthroat world
of traders and stock brokers then have we got a job for you!
You have a head for math and an inclination to numbers and monitoring trade movements and investment opportunities, so you can undoubtedly fare well as a personal finance advisor or consultant. You will be able to enjoy a much more relaxed environment servicing clients who are in need of your specific expertise, rather than having to deal with very competitive co-workers.
Although laboring at Wall Street may pay better, working as financial
consultant also pays well with an average salary of $66,000 annually, plus
additional incentives and benefits.
3. Sales Engineers
If you are afraid of forever being stuck in the construction field then
you can look forward to finally throwing away your hard hat by working as a
sales engineer.
Sales engineers are
especially hired to sell technology and equipment to businesses. Unlike typical
engineers, working in sales allows you to earn additional commissions apart
from your regular salary. Sales engineers, according to the US Bureau of Labor
and Statistics, can earn up to $89,000 per year.
4. Forensic Science Technicians
If you have the brains of CSI’s Grissom but would rather stay in a lab
instead of working on the field then you can still fulfill your CSI dream by
working as a forensic science technician.
Forensic lab
technicians are responsible for and most concerned with analyzing physical
evidence instead of collecting any from the crime scenes. Acquiring additional
background in legal management is also an advantage beyond simply earning a
bachelor’s degree.
As a forensic science technician, you can bring home anywhere from
$50,000 to $60,000 depending on your experience and technical skills.
5. Corporate Attorney
If your heart can no longer take the stress of working at a law firm,
why not become a corporate attorney instead?
Your work as a corporate attorney will
primarily be limited to giving legal advice to businesses especially with
regards to contracts, patents and IPOs. Apart from the joy of not having to
worry about length court proceedings, you also get to enjoy a hefty salary that
is estimated at roughly $113,310 yearly.
If you’ve discovered the career path you started isn’t all you hoped,
there are lesser known jobs out there that will allow you to put your skills to
work in an environment closer to your liking. College career counselors warn
graduating students that they should expect several career changes over their
working life. Figure out what you love about what you currently do, and how you
can use those skills in an area that appeals to you more in the long term.
About the Author
Tim’s career path has included being a financial planner, educator, and
cabinet maker. You’ll currently find him writing for onlineloancalculator.org and helping
car buyers make smart purchasing decisions.
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