Accounting Terms in JAIIB AFB: One of the flagship courses conducted by the Indian Institute of Banking and Finance(IIBF) is JAIIB. JAIIB Exam is for the banking and financial sector employees in which they receive monetary as well as non-monetary benefits. There are 3 papers for the JAIIB Exam: PPB(Principles and Practices of Banking), AFB(Accounting and Finance for Bankers), and LRAB(Legal and Regulatory Aspects of Banking). AFB is one of the most important papers and aspirants from non-commerce background find it to be difficult. To score good marks in the AFB Paper candidates must have command over the topics of AFB. In this article, we have provided the various accounting terms that will help the candidates during their preparation.
Legal Terms in JAIIB LRAB
JAIIB AFB Accounting Terms
The candidates preparing for the JAIIB AFB Exam must be updated with the accounting terms. This will help them in building strong command over the topics of AFB. Some of the important Accounting Terms are listed below:
- Accounting: The system of measuring, processing, and communicating financial information for a business or organization and then analyzing, verifying, and reporting the results is called Accounting.
- Accounting Period: A period of time during which the accounting functions are covered that can either be a calendar year, fiscal year, week, month, or quarter, etc.
- Accounts Payable: Money possessed by a business to its suppliers and vendors for the goods and services that are purchased on credit is called Accounts Payable.
- Accounts Receivable: It is the exact opposite of Accounts Payable. The amount of money that a customer has to pay to a business after the goods or services have been delivered to them.
- Asset: Any resource or valuable item that is owned and controlled by a business is called asset. Assets are of two types: Current Assets and Fixed Assets. The assets that are short term and will be converted to cash within a year are called Current Assets. Fixed Assets are long term assets and will be beneficial to a business for more than a year.
- Asset Classes: A grouping of financial instruments that have similar financial characteristics and are subject to the same laws and regulations. Some of the common examples of asset classes are stocks, bonds, currencies, etc.
- Accrued Expense: An expense that has been recognized but still not paid is called Accrued Expense.
- Scale Sheet: A Balance Sheet is the summary of the financial statement of the assets, liabilities and shareholding equity of a company.
- Capital: An asset or resource used by a business to create income is called capital. By subtracting the current assets from the current liabilities we can calculate the Working Capital.
- Cash Flow: The revenue or expenses that is expected to be generated through business activities during a specific accounting period is called cash flow.
- Credits: The accounting entries that increases the liabilities or decreases the assets is called credit.
- Debit: Debit is just the opposite of Credit. The accounting entries that decreases the liabilities or increases the assets is called Debit.
- Depreciation: A Decrease in the price of fixed assets due to wear and tear, passage of time, and obsolescence is termed as Depreciation.
- Expenses: Money that is sent for a particular purpose is called expenses. There are four types of expenses: Fixed Expenses, Variable Expenses, Accrued Expense, and Operational Expenses.
- Equity: The amount of money that will be paid to the shareholders of a company when all the assets are sold and all the debts of the company are paid off.
- Trial Balance: A bookkeeping worksheet prepared at the end of every reporting period in which the balance of all ledgers are compiled into columns of credit balance and debit balance is called Trial Balance.
- Income: Money generated by a business through selling its products or from normal business operations is called Revenue.
- Present Value: The current value of a future sum of money is called Present value. Present Value is calculated on a specific rate of return.
- Net Profit: The amount of money earned by a business after subtracting the expenses spend on operation, interest, and tax for a specific time period is called Net Profit.
FAQs: Accounting Terms in JAIIB AFB
Q.1 What are some of the important accounting terms in JAIIB AFB?
Year. Some of the important accounting terms in JAIIB AFB are Capital, Assets, Account Payable, Cash Flow, Balance Sheet, etc.
Q.2 What do you mean by Accounting?
Year. The system of measuring, processing, and communicating financial information for a business or organization and then analyzing, verifying, and reporting the results is called Accounting.