What is a Letter of Credit? A letter of credit is a payment tool used in international trade transactions, which provides an irrevocable guarantee from a bank to a buyer that payment will be made to the seller, provided that certain conditions are met. The letter of credit is an agreement between the buyer, the …
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What is Crowdfunding? Crowdfunding is a widespread phenomenon that has emerged in the past decade. It is a type of financing where people collect funds from multiple sources, online, to support a particular project or venture. Crowdfunding has become a popular way for entrepreneurs to fund their start-up businesses or raise money for a cause …
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What is a Credit Score? A credit score is a 3-digit numeral that lenders use to assess a consumer’s creditworthiness and ability to manage credit. It is based on the consumer’s credit report and is calculated by a credit bureau. As a consumer, having a good credit score is essential because it can affect a …
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What is Costing? Costing is a system of determining or assigning the cost of an element or product, or business. Everything sold has some worth, and the costing system gives it. The price of anything or a product is set for customers, employees, geographic regions, distribution channels, product or product lines, subsidiaries, and the entire …
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What is the Cost of Living? The cost of Living is the amount required to maintain or meet basic living needs. The cost of Living includes all necessities like food, clothing, utility bill payments, recreation, education, healthcare, taxes, and other essential utilities to meet expenses. It helps in determining how much people spend on their …
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What is the Short-Term Solvency Ratio? The short-term solvency ratio is a financial metric used to assess a company’s ability to pay its current obligations. It is determined by dividing the current assets by the current liabilities of the organization. A current obligation is a debt due within a year, whereas a current asset is …
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What is Private Equity? Private equity is an investment in companies not listed on a public stock exchange. Private equity investors provide capital to these companies in exchange for ownership stakes, to improve the company’s operations and eventually sell the investment for a profit. Private equity firms target undervalued or underperforming companies. Private equity firms …
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What is investing? Investing is committing money or capital to a project to obtain an income or profit. It is a broad term that refers to the purchase of assets in the hope that they will provide income in the future. Investing can be done by purchasing stocks, bonds, mutual funds, precious metals, and other …
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What is Hedge Fund? A hedge fund is an acquisition corporation that combines money from accredited people and institutions to invest in various assets, frequently using sophisticated risk management and portfolio development strategies. It is often organized as a limited partnership, limited liability corporation, or comparable vehicle and is managed by a reputable investment management …
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What is Hedge Fund? A form of investment fund known as a hedge fund employs a variety of methods to provide profits for its investors. These strategies may include leveraging, short selling, and investing in a diverse range of assets such as stocks, bonds, and derivatives. Hedge funds are structured as private partnerships and are …
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What is GST? A value-added tax known as the Goods and Services Tax (GST) is imposed on the delivery of goods and services in India. It is a comprehensive, destination-based tax levied on every value addition. A single tax on the provision of goods and services is known as the GST from the manufacturer to …
What is Debt? Debt is a financial obligation in which a borrower agrees to pay back a lender a certain amount of money, with interest, over a set period of time. Debt can take many forms, including mortgages, student loans, credit card balances, and car loans. One of the key advantages of borrowing money is …
What are Accounting Concepts? Accounting concepts are the fundamental principles that underlie the practice of accounting. They provide a framework for the way financial transactions and events are recorded, classified, and reported. Some of the key accounting concepts include: Business entity concept: This concept states that a business is separate and distinct from its owners …
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What is Aid? Aid is provided for the exact purpose of providing help to another entity or another country. Aid can be in form of funds or resources. For example, When there was an Earthquake in 2015 in Nepal. There was mass destruction and a lot of collateral damage. At that time, India provided Aid …
What is Accruals? Accruals are earnings or costs that have accumulated over time and are now payable in the current accounting quarter. This is done so that any accumulated accounting transactions and outstanding payments can be concluded at the conclusion of the accounting period. Accrued income, which refers to money for which labor has been …
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