Financial Vocabulary | Business Vocabulary

Absolute monopoly

It refers to a condition of the market where only one seller has total command or control over the sale of a given article. In normal circumstances such a condition does not exist.

Ad Valorem Duty

It refers to the duty or tax imposed on a commodity depending upon its value.

Authorised capital

It refers to the maximum capital a public limited company can raise through public subscription by sale of shares.

Balance sheet

Statement of account over a specified period of time showing assets and liabilities under specific heads from which the soundness or otherwise of an institution or organization is determined.

Bank credit

Purchasing power provided by banks in excess of their cash balances, by reason of public confidence in their stability.

Bank note

A promissory note issued by a bank payable to bearer on demand without interest and acceptable as money

Barter

Trade by exchanging one commodity for another

Bear

A stock exchange term denoting a falling market when speculators sell stock in the hope of buying again at lower prices

Bearer cheque

A cheque that is encashable by bearer (person holding cheque)

Black market

Profiteering (usually illegal) by hoarding and selling at exorbitant prices, without accounting or false accounting

Black money

Money accumulated by way of illegal transactions without declaring it for tax purposes

Bonus

Payment in addition to wages and salaries for employees, and in addition to dividend for shareholders

Budget

A statement of anticipated revenue and expenditure of a sovereign body for a given period of time

Budgetary deficit

The difference between all the receipts and the total expenditure

Bull

It refers to that sort of a speculator, who stands to gain with a rise in the price of shares and stocks

Buyer’s market

A market where goods and services are available in plenty and the prices are relatively low

Capitalism

A system under which private entrepreneurs have complete freedom to devise and control production and distribution for their own profits, competition being the only limiting factor

Cash ratio

It refers to the ratio of aggregate bank holdings of cash against its aggregate liabilities above a particular time

Central bank

The apex bank which controls, supervises and guides the functioning of commercial banks in the country

Closed economy

An economy which neither exports nor imports anything

Letter of Credit

A letter from a bank, firm or from one person to another, authorizing payment of a specified sum to third person for which the sender assumes responsibility

Crossed Cheque

A cheque crossed with two parallel lines and “&Co” written in between them. This is done as a safety measure. A crossed cheque is not to be paid on the counter. The amount is normally to be credited to the payee in his own account

Current account

Bank account from which withdrawals are allowed without any restriction on frequency or amount, so long as there is a credit balance

Customs duty

Tax on goods imported into and exported from a country

Death duty

Also called estate duty. Tax payable on property, after death of the owner, by his heirs

Debenture

Bond issued by an organization or undertaking to repay the amount with a specified interest after a specified period. Debenture holders are only creditors and not shareholders.

Deficit financing

When expenditure exceeds revenue, paper currency is printed to fill the gap. It is beneficial when it creates greater productivity. If there is no adequate increase in productivity it will generate serious inflation.

Deflation

It is the fall in prices, increase in unemployment, etc., as a result of less circulation of currency in the market

Demonetization

It is the government act of depriving metallic coins or paper money of specified denomination or its status as money. This is resorted to unearth hidden wealth.

Depreciation

In accounting, this is a percentage reduced from the value of machinery or fixed assets for wear and tear every year.

Devaluation

It is the deliberate reduction in the value of home currency in relation to foreign currency

Dividend

Share of the profits allotted to each share in a joint stock company

Equity shares

They are ordinary shares with no guarantee of dividend. Equity shares gain maximum returns when there are high profits.

Exchange rate

It refers to the rate at which the currency of one country exchanges with the currency of another country.

Excise duty

Tax levied on certain goods produced and consumed in the country

Gift tax

Gift on tax to prevent tax evasion by genuine or fictitious gifts

Gross National Product

It is the total monetary value of all final goods and services produced in a country during one year

Hard currency

Foreign exchange which is difficult to get.

Inflation

Undue increase in quantity of money in proportion to purchasing power

Mixed economy

An economic system where public and private sectors exist side by side

Nationalisation

Government take-over of business, industrial or public utility services

Net National Product

It is the gross national product minus allowance for depreciation of capital goods.

Octroi

It is a tax charged by municipality or local body on the goods and commodities brought into town.

Open economy

Economy that has trade relationships with other countries

Per Capita Income

It is the average income of an individual wage earner in a country in one year

Primary sector

It is the sector of the national economy which deals with the production of primary or raw materials, i.e., agriculture, mining etc.

Public sector

Undertakings financed and operated by a government

Secondary sector

It is the sector of the national economy which comprises manufacturing and processing industries

Security

A guarantee in the form of cash, bonds, property etc., kept as pledge for repayment of debt or protection against financial loss

Soft loan

It is a form of loan given either at a low rate of interest or without any interest.

Turnover

The total value of the sales made by a company or firm in one accounting year is called the turnover.

Wealth Tax

A tax imposed on the wealth possessed by individuals in a country

image_pdfimage_print

Manjusha Nambiar

Hi, I am Manjusha. This is my blog where I give English grammar lessons and worksheets.

Leave a Reply

Your email address will not be published. Required fields are marked *