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

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Tracking Financial Performance Standards of Microfinance InstitutionsTermOperating ExpensesOpportunity CostPayroll RegisterPensionPetty Cash FundPetty Cash Payments RecordPetty Cash VoucherPetty CashierPledged AssetPortfolioPostingPosting ErrorsPrepaid ExpensePrincipalPrinciple of MaterialityPrinciple of Objective EvidencePrior Period AdjustmentDefinitionCosts related to a company's operations. Examples are salaries, advertising,sales commissions, travel, and entertainment. Listed as a category on thestatement of earnings.The potential benefit that is foregone from not following the best (financiallyoptimal) alternative course of action.Summary of the gross earnings, deductions, and net pay for all employees fora specific payroll period.Retirement plan offered by an employer for the benefit of an employee, usuallyat retirement, through a trustee who controls the assets. (See employee benefitplan.)A small amount of cash kept in the office for making small payments foritems such as postage and office supplies. A special cash fund used to payrelatively small amounts.An auxiliary record, one that is used to record payments from the petty cashfund. At the end of the month, the record is summarized and used as a basisfor a journal entry.A voucher used when payment is made from the petty cash fund. It shows theamount of the payment, the purpose, and the account to be debited.The person designated to disburse money from the petty cash fund.Asset placed in a trust and used as collateral for a debt.A combination of assets held for its investment benefits, including financialand non-financial returns. The asset mix is usually varied in kind and size tomaintain an acceptable level of risk and return.The process of transferring amounts from the journal to the ledger. The processof transferring debits and credits from a journal to the accounts.Errors that result from incorrect transfers from the journal to an account orfrom the ledger to the trial balance.Cost incurred to acquire economically useful goods or services that are expectedto be consumed in the revenue-earning process within the operating cycle. Apurchased commodity or service that has not been consumed at the end of anaccounting period. Another name for deferred expenses, usually applying toadvance payments that cover a year or less.In commercial law, the principal is the amount that is received, in the case ofa loan, or the amount from which flows the interest. Face amount of a security,exclusive of any premium or interest. The basis for interest computations.The amount of money borrowed or the amount of credit extended. Also calledthe face value.States that proper accounting procedures have to be strictly followed only forevents and transactions that would have an effect on a business's financialstatements.States that source documents should form the foundation for recording businesstransactions.Correction of a material error related to a prior period or periods, excludedfrom the determination of net income.132
Glossary of Financial TermsTermProfit CenterProfitabilityProjectionPromissory NoteProxyQuick AssetsR&DRateRatioRatio AnalysisReal AccountRealization PrincipleReceivablesReconciliationRefinancing AgreementReinsuranceReport of IndependentAccountantsAny segment of a business that incurs expenses while producing revenue.The ability of a business to earn a reasonable return on the owners' investments.The ability of a firm to earn income.Prospective financial statements that include one or more hypotheticalassumptions.Promise to pay. Written contract between a borrower and a lender that issigned by the borrower and provides evidence of the borrower's indebtednessto the lender. Evidence of a debt with specific amount due and interest rate.The note may specify a maturity date or it may be payable on demand. Thepromissory note may or may not accompany other instruments such as amortgage providing security for the payment thereof. (See demand loan.) Awritten promise to pay a sum of money at a definite time in the future. Alsocalled a note.Document authorizing someone other than the shareholder to exercise theright to vote the stock owned by the shareholder.Current assets that can be converted to cash right away, such as receivablesand marketable securities. The sum of cash, receivables, and marketablesecurities.See Research and Development.The annual percent charged on the principal.A fractional relationship of one number to another.A measure of the relativesize of two numbers. Usually, financial ratios are expressed as a times multiple(x) or a percentage (%). Ratios provide a quick way to compare a company toits performance over time, to other companies in the same industry, and tothe industry average.Comparison of actual or projected data for a particular company to otherdata for that company or industry in order to analyze trends or relationships.A balance sheet account.DefinitionThe principle that states that revenue should be recorded when it is earned,even though cash may not be collected until later.Accounts receivable; an amount that is owed the business, usually by one ofits customers as a result of the ordinary extension of credit, Amounts of moneydue from customers or other debtors.Comparison of two numbers to demonstrate the basis for the differencebetween them.Arrangement to provide funding to replace existing financing, the mostcommon being a refinance of a home mortgage.Process by which an insurance company obtains insurance on its insuranceclaims with other insurers in order to spread the risk.A summary of the findings of a firm of independent certified public accountantsthat audits, or examines, a company's financial statements. This report isincluded in the company's annual report. Also called auditors' report andauditors' opinion.133
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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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