Assets refer to the economic resources of the business which the firm acquires either out of its own funds or borrowed funds which are expressed in terms of money. These are meant for use in the business and will increase the firm's profit-earning capacity. On the other hand, Liability refers to the amount payable by the firm to external parties. It is the claim of external parties like creditors, banks, debenture holders, etc. on the assets of the firm arising due to past transactions. In … [Read more...]

Discount is an allowance provided to the customers in specific circumstances. In business, there are two main types of discounts, i.e. trade discounts and cash discounts. While trade discount is the reduction in the list price of the product, whereas cash discount is offered by the firms to its customers to encourage early payments. The main difference between trade discount and cash discount is that a separate ledger account for discounts allowed is opened in the books of the seller and … [Read more...]

Stock Exchange is a marketplace, wherein the trading of securities between buyers and sellers takes place. The two largest and famous stock exchanges of India are the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Sensex is a flagship index of BSE, whereas Nifty is a main index of NSE. Important: Every share of a company has equal value and Prices of shares fluctuate depending on the demand and supply of the shares in the market. Nifty and Sensex are basically market indices, … [Read more...]

Taxes charged directly on the income or wealth of an individual is called Direct Tax. On the contrary, an indirect tax is a tax that is added to the price of goods and services. What is a Tax? Tax is a financial obligation, payable to the government for the cost of living in a society. It is a fee levied by the government of the respective country or territory on income, activities, goods, and services. It is broadly classified into direct tax and indirect tax. Why Tax is imposed? The main … [Read more...]

Provident Fund is an investment fund, wherein specified individuals can make the contribution, and a lump sum amount which includes the principal and interest thereon is paid to the holder, either on maturity or on retirement. EPF or Employees Provident Fund refers to an arrangement whereby a certain percentage of the salary of the employees is deducted every month to contribute it towards the EPF account. On the other hand, PPF or Public Provident Fund is one such scheme for the general … [Read more...]

The term economics refers to a science of making logical decisions regarding the use of scarce resources, so as to satisfy the most compelling of unlimited wants. It is many times juxtaposed with the term finance. Finance is defined as the study and management of funds for the purpose of wealth maximization. While economics studies how people, maximize gains from limited resources, i.e. select the best alternative with the objective of maximizing the level of satisfaction. Conversely, finance … [Read more...]

The biggest difference between layoff and retrenchment is that layoff is volatile in nature, i.e. employees are recalled, once the period of layoff is over while retrenchment is non-volatile i.e. that involves full and final termination of services. The employment contract is terminated with the employees by the employer, due to three major reasons which are: (i) the organization is going through the lean period, (ii) initial faulty hiring, (iii) employee shows deviant behavior, which affects … [Read more...]