Tracking Financial Performance Standards of ... - Sa-Dhan

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Tracking Financial Performance Standards of Microfinance InstitutionsTermCashCertificate of Deposit (CD)ChargesChart of AccountsCheckCheck RegisterCheck StubCheckbookClassified Balance SheetClassified Income StatementClosing EntriesClosing ProcessCollateralCombined Financial StatementCombined JournalCommunity-Based FinanceInstitution:DefinitionAny medium of exchange that a bank will accept at face value. Currency andchecks on hand and deposits in banks. Listed in the current assets section onthe statement of financial position.Formal instrument issued by a bank upon the deposit of funds which may notbe withdrawn for a specified time period. Typically, an early withdrawal willincur a penalty.Charges or fees by the bank that are subtracted directly from the depositor'saccount and appear on the bank statement. Also called bank charges.A directory or listing of accounts in the ledger. A listing of all the accountsused by a business enterprise.A written order directing a bank to pay a specified sum of money to a designatedperson or business.A modified form of the cash payments journal used to record all transactionspaid by check.Part of a check that remains in the checkbook as a permanent record of thecheck.A bound book of checks with stubs; the depositor's record of the checkingaccount.A balance sheet that divides the assets and liabilities sections into the followingsubsections: current assets and long-term assets, and current liabilities andlong-term liabilities.An income statement divided into the following sections: revenue cost ofgoods sold (funds), operating expenses, and other income and expenses.Entries made at the end of an accounting period to transfer the balances of thetemporary accounts to the owner's capital account. An entry necessary toeliminate the balance of a temporary account in preparation for the followingaccounting period.The process of transferring the balances of temporary accounts to the owner'scapital account.Assets pledged to secure the repayment of a loan. Asset provided to a creditoras security for a loan.Financial Statement comprising the accounts of two or more entities.A multicolumn journal used by small businesses to help save journalizing andposting time. It has two special columns for recording debits and credits tocash, various other special columns for recording transactions that occur often,and two general columns for recording transactions that occur less often. Alsocalled a combination journal.The term "Community-based finance institution" (CBFI) has been formulatedto define organizations which enable low-income groups to participate fullyand democratically in the development process and which have their roots inthe community. Frequently, these organizations are referred to as co-operatives,but some community-based organizations are in fact not co-operatives butgroups with a similar structure and objectives [UN-ESCAP (1991)].118
Glossary of Financial TermsTermComparative FinancialStatementCompliance AuditCompound Interest PrinciplesComposite-Rate DepreciationMethodComprehensive IncomeConservatismConsistencyConsistencyConsolidated FinancialStatementsConsolidated StatementContingent LiabilityContinuing OperationsCo-Operative:Correcting EntryDefinitionFinancial Statement presentation in which the current amounts andthe corresponding amounts for previous periods or dates also are shown. Aside-by-side comparison of a company's financial statements for two or moreaccounting periods.Review of financial records to determine whether the entity is complying withspecific procedures or rules.Interest computed on principal plus interest earned in previous periods.A method of depreciation based on the use of a single rate that applies toentire groups of assets.Change in equity of a business enterprise during a period from transactionsand other events and circumstances from sources not shown in the incomestatement. The period includes all changes in equity except those resultingfrom investments by owners and distributions to owners.An investment strategy aimed at long-term capital appreciation with low risk;moderate; cautious; opposite of aggressive behavior; show possible losses butwait for actual profits. Concept which directs the least favorable effect on netincome.Accounting postulate which stipulates that, except as otherwise noted in theFinancial Statement, the same accounting policies and procedures have beenfollowed from period to period by an organization in the preparation andpresentation of its financial statements.The accounting principle that requires a firm to continue to use a methodonce chosen, rather than switch from method to method arbitrarily or fortemporary advantage. The concept that assumes that the same generallyaccepted accounting principles have been applied in the preparation ofsuccessive financial statements.Combined Financial Statements of a parent company and one ormore of its subsidiaries as one economic unit.A financial statement resulting from combining parent and subsidiary companystatements.Potential liability arising from a past transaction or a subsequent event. Apossible liability, such as on a discounted note of a customer, that may becomea real liability if certain events occur. A potential obligation that will materializeonly if certain events occur in the future.Portion of a business entity expected to remain active.A co-operative, as defined by the International Labour Organization is anassociation of persons, usually of limited means, who have voluntarily joinedtogether to achieve a common economic end through the formation of ademocratically controlled business organization, making equitablecontributions to the capital required and accepting a fair share of the risks andbenefits of the undertaking [UN-ESCAP (1991)].An entry used to correct certain types of errors in the ledger.119
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TECHNICAL TOOL SERIES 1TRACKING FIN
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INTRODUCTION TOMICROFINANCE STANDAR
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5. PERFORMANCE STANDARDS - CONCEPT,
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ACKNOWLEDGMENTSThe need of the oper
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Tracking Financial Performance Stan
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Page 138 and 139: REFERENCESBarrel, Margaret, Michael
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