Revenue, profit and income, are three terms which sound same to a layman, although in business terminology there is a huge difference between them. Revenue implies the money received by the company from its day to day operations, alongwith the non-operating activities. On the other hand, profit implies the financial gain, which is arrived after deducting amount spent from the amount earned, by the concern, during the course of business in an accounting period. Income can be understood as the … [Read more...]
Difference Between Cash Book and Cash Account
In business, the transaction may occur in two ways, i.e. cash or credit. For recording cash transaction, there are separate books or accounts are maintained by the business entities, which are cash book and cash account. Cash Book is a subsidiary book, which records all the cash related transactions, i.e. receipts or payments. In the same way, Cash Account is an account in which cash receipts and disbursements are entered. These two differ in the fact that cash book is a subsidiary book, while … [Read more...]
Difference Between Cash Credit (CC) and Overdraft (OD)
Business organizations need funds in order to meet their monetary requirement. Funding provided by banks for this purpose can either be long term or short term. Nowadays individuals/entities choose short term loan facility, in the form of cash credit and overdraft. Cash Credit is a type of facility provided by the bank or financial institution in which, a company can withdraw an amount more than what he holds to his credit against the security of stock. On the contrary, Bank Overdraft is … [Read more...]
Difference Between Savings Account and Current (Checking) Account
Before going to open an account in a bank, one should be clear in mind, as to which type of account is best suits their requirement. If a person wants to open an account to keep his/her savings to fulfill their future needs and desires to earn income from such savings then nothing is better than a saving bank account. However, if an individual or entity, wishes to open an account that can be operated end number of times, during a working day, then current account or checking account is … [Read more...]
Difference Between Tax Invoice and Retail Invoice
Invoices are an important instrument used in day to day operations of the business which acts as an evidence of the transaction. In general, there are two types of invoices - tax and retail. Tax invoice may be understood as the invoice issued by one registered vendor to another, during sales. Conversely, a retail invoice also known as sale invoice is issued, the sale is made to the final consumer. The main purpose of issuing tax invoice is to avail input tax credit. On the other hand, the … [Read more...]
Difference Between Capital Receipt and Revenue Receipt
In general, two types of receipts occur during the course of business. Capital Receipts are described as the money brought to the business from non-operating sources like proceeds from the sale of long-term assets, capital brought by the proprietor, sum received as a loan or from debenture holders etc. In contrast revenue receipts are the result of firm's routine activities during the financial year, which includes sales, commission, interest on investment. Capital receipts differ from … [Read more...]
Difference Between Capital Expenditure and Revenue Expenditure
The occurence of expenditure during the course of business is very natural. Generally, expenditure is incurred to increase the efficiency of business and further returns. These are braodly classified into two categories, i.e. capital expenditure and revenue expenditure. Capital Expenditure is an expense made to acquire an asset or improve the capacity of the asset. Conversely, revenue expenditure implies the routine expenditure, that is incurred in the day to day business activities. The most … [Read more...]
Difference Between Purchase Order and Invoice
Purchase order or PO is the first formal offer document created by the buyer and delivered to the seller, with an aim of making purchase. When the document is accepted by the seller, it becomes a legally binding contract between the two parties. It indicates the type, quality, quantity, rate of the goods desired by the buyer. Once, the goods are delivered invoice is issued to the buyer for payment. Invoice is a commercial document, which is used by the seller to notify the buyer that payment is … [Read more...]
Difference Between Invoice and Cash Memo
A business transaction is one that is capable of being measured in monetary terms and that affects the company's operations. There are hundreds of business transactions that takes place daily. To record these transactions, there are different kinds of commercial documents are used. One such document is an invoice, which may be understood as a legal and commercial instrument, made by the vendor and sent to the customer or client, to authorize the sale. It sets forth, all the goods sent or … [Read more...]
Difference Between Whole Life and Term Life Insurance
Whole life insurance is a type of permanent life insurance that lasts for as long as the insured party pays the premium. Term life insurance lasts for a definite period, i.e. term. Whole life insurance differs from term life insurance in the sense that it never expires, i.e. it continues as long as the customer continues making payment of premiums. Also, it allows cash value along with death benefit, which becomes a major source of funds for future needs. Cash Value component is not present … [Read more...]
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