Accounting and Finance Questions

FPO (Follow on Public Offer) is a process by which a company, which is already listed on an exchange, issues new shares to the investors or the existing shareholders, usually the promoters. FPO is used by companies to diversify their equity base. A follow-on public offer (FPO) is also called Further Public Offer.

Reconciling the bank statement monthly is an example of independent internal verification

The three steps in the accounting process are

1. Identification,

2. Recording, and

3. Communication. 

Hence, analyzing and interpreting financial reports is not involved in the accounting process.

A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products.

Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to individual members of the public.

Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.

Bank Rate is the interest rate at which the RBI allows finance to commercial banks. By Bank Rate, we mean bank can regulate the level of economic activity.

Budgetary Control is establishment of budgets and the continuous comparison of actual results with the planned results. It computes the variances and after that management takes necessary actions to maintain favorable variations, through revision of the budgets.

A deposit in transit is cash (currency, coins, checks, electronic transfers) that a company has received and is rightfully reported as Cash on its balance sheet, but does not appear on the bank statement until a later date.