In simple terms, the amount paid for the use of borrowed funds is known as interest. It is the money that is paid at short intervals at a specified rate for the money lent or for postponing the repayment of the financial obligation. It should not be confused with the dividend, which is the amount which a company pays to its shareholders out of its profit. Perhaps, the interest and dividend can be payable or receivable depending upon whether the company owns or owes money. When the funds are … [Read more...]
Difference Between Marginal Costing and Absorption Costing
There are two alternative approaches for the valuation of inventory; they are Marginal Costing and Absorption Costing. In marginal costing, marginal cost is determined by bifurcating fixed cost and variable cost. Only variable costs are charged to operation, whereas the fixed cost are excluded from it and are charged to profit and loss account for the period. Converselty, Absorption costing or otherwise known as full costing, is a costing technique in which all costs, whether fixed or … [Read more...]
Difference Between Tax Avoidance and Tax Evasion
Every assessee wants to escape from paying taxes, which encourages them to use various means to avoid such payment. And when it's about savings if taxes, the two most common practices that can be seen all around the world are tax avoidance and tax evasion. Tax avoidance is an exercise in which the assessee legally tries to defeat the basic intention of the law, by taking advantage of the shortcomings in the legislature. On the contrary, tax evasion is a practice of reducing tax liability … [Read more...]
Difference Between Provision and Reserve
In the business glossary, provision implies money set aside to cover an anticipated liability or loss. Look the other term Reserve, reserves refer to withholding some amount for any use in future. Provision and reserves are two terms which are highly confused, but they carry different meanings. While running a business, some expenses or losses relate to the current financial year, but their amount is not known, as they are not yet incurred. For such expenses/losses provision is created, as a … [Read more...]
Difference Between Money Market and Capital Market
The financial market is a marketplace where investors deal in financial instruments. It provides a vehicle for allocation of savings to investment. It can be grouped as money market and capital market. Both the markets are very important in the financial sector. In the money market, extremely liquid financial instruments are traded, i.e. monetary instruments of short-term nature are dealt. On the contrary, the capital market is for long term securities. It is a market for those securities which … [Read more...]
Difference Between Primary Market and Secondary Market
Securities market can be defined as the market, whereby financial instruments, obligations, and claims are available for sale. It is classified into two interdependent segments, i.e. Primary Market and Secondary Market. Market. The former is a market where securities are offered for the first time for receiving public subscription while the latter is a place where pre-issued securities are dealt between the investors. While primary market offers avenues for selling new securities to the … [Read more...]
Difference Between BSE and NSE
Stock Exchange is a marketplace, where securities can be freely traded between investors with the help of members i.e. brokers. It is a great platform for purchasing and selling securities, debt and derivatives. It is a key indicator of financial strength of the country's economy. In India, there are two major stock exchanges, Bombay Stock Exchange, and National stock exchange. Bombay Stock Exchange is shortly known as BSE; it is the first stock exchange of the continent. On the contrary, … [Read more...]
Difference Between Leadership and Management
Leadership is a quality of influencing people, so that the objectives are attained willingly and enthusiastically. It is not exactly same as management, as leadership is one of the major element of management. Management is a discipline of managing things in the best possible manner. It is the art or skill of getting the work done through and with others. It can be found in all the fields, like education, hospitality, sports, offices etc. One of the major difference between leadership and … [Read more...]
Difference Between Profit Maximization and Wealth Maximization
Financial Management is concerned with the proper utilization of funds in such a manner that it will increase the value plus earnings of the firm. Wherever funds are involved, financial management is there. There are two paramount objectives of the Financial Management: Profit Maximization and Wealth Maximization. Profit Maximization as its name signifies refers that the profit of the firm should be increased while Wealth Maximization, aims at accelerating the worth of the entity. Profit … [Read more...]
Difference Between Policies and Procedures
Rules and regulation of the business organization are framed in the form of policies. These are the guiding principles of an organization. It should not be confused with procedures, as both are are created by top level management for middle and low-level management. Procedure implies the step by step sequence, for the performance of activity within the organisation. Policies are general statement that sets out the limits within which decisions are taken by the managers and thus assures the … [Read more...]
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