Finance is the study of funds management, or the allocation of assets and liabilities over time under conditions of certainty

and uncertainty. A key point in finance is the time value of money, which states that a unit of currency today is worth more than the same unit of currency tomorrow. Finance aims to price assets based on their risk level, and expected rate of return. Finance can be broken into three different sub categories: public finance, corporate finance and personal.

There are many different types of finance careers. Almost everyone has the need for money expertise, from individuals and small businesses to major corporations. Choosing a specialty is usually a lot harder than finding different options. Banking Many finance careers are housed within banking institutions. Some bankers start out as tellers, educating consumers about various account options and assisting with deposits and withdrawals. Accounting Careers in the accounting sector deal primarily with financial reconciliation, ensuring that clients stay on top of their bills and other money-related obligations. Tax accountancy is a popular career track in countries that require individuals and businesses to file and prepare tax returns,. Most businesses also have in-house accountants who manage expenditures and keep track of money going in and coming out. Financial Planning Money matters are often complicated for both individuals and businesses, which is where financial planning comes in. Careers in financial planning usually focus on helping clients make the most of what they have. When it comes to families and individuals, planners focus on growing assets, setting up education funds for the future, or helping people make good investment decisions as they plan for retirement. Investments and Stocks Those who work on the stock market or with investment instruments like bonds or mutual funds often have some overlap with financial planners. The brunt of these jobs comes in marketing and selling investments, though; rarely do professionals ever directly offer clients advice. Some of these careers are situated on actual trade floors, like the New York or Tokyo

stock exchanges. Others are housed in offices, where investors and analysts watch market trends in real time and make quick judgments about whether to buy or sell. Real Estate The purchase and sale of property is an inherently financial matter, and finance careers abound in this sector. A lot of money transactions happen in real estate, from home appraisement and property management deals to mortgage negotiation and loan settlements. Insurance In most places, insurance rates, fees, and premiums are calculated by a team of financially savvy underwriters. Underwriters study market trends and demographic charts to come up with numbers that represent a favorable gamble for the insurance company. These sorts of financial exist in a range of sectors,

A company might raise new funds from the following sources:

The capital markets: Loan stock Retained earnings Bank borrowing Government sources Business expansion scheme funds Venture capital Franchising.

Equity Issuance

Organizations get funding also by issuing stocks--or shares of ownership--in the capital markets. They may issue those shares privately to institutional investors, especially if the organization is not listed on a securities exchange. Investors who buy stocks--also called shareholders or stockholders--do not receive periodic interest payments; however, they receive dividends on a periodic basis, and make profits when the stock increases in value.

Debt issuance
Companies may borrow by issuing bonds or other forms of debt in financial-or capital--markets. They may also borrow directly from private institutional investors such as banks, hedge funds, venture capital firms and brokerage companies. Investors who lend to entities are called bondholders. They might be paid interest on a semi-annual or annual basis; the amount lent is reimbursed at maturity--that is, the end of the holding period. They hold no voting or management right with respect to the debtor. For example, a bondholder in Company A might

receive interest payments twice a year from the debtor, but will not participate in the annual shareholders meeting.

Hybrid Financing

Companies may raise funds by issuing financial instruments with debt and equity features. Such instruments are called hybrid instruments or quasi-debt. There are two types of quasi-debt: convertible bonds and preferred shares; they pay fixed dividend but do not confer voting or management right on the owner. Holders of convertible bonds may convert such bonds into equity in accordance to the bond agreement. For instance, a holder of Company A's bonds might convert such bonds into shares if the stock has increased substantially in value after a period of time. Money refers to the definition of money. Money is a token or item which acts as a medium of exchange that has both legal and social acceptance with regards to making payment for buying commodities or receiving services, as well as repayment of loans. Usually, money can be categorized into the following types:

Commodity Money: This is a type of money which can be utilized both as an exchangeable commodity and a general purpose exchange medium in its own capacity.

Fiat Money: Fiat money is that type of money the value of which is ascertained with the help of legal methods instead of the associated availableness of commodities and services. Fiat money can symbolize government promises or a commodity.

Credit Money: Credit money refers to the claim placed to a legal individual, which can be implemented to buy goods and services. Soft Money: Soft money refers to the paper currency rather than gold, silver, or any other types of coined metal. Hard Money: Hard money refers to the value of different gold, silver, or platinum coins (bullion) in circulation in the field of international trade.

MONEY FUNCTIONS:
Any item used as money in an economy automatically takes on four basic functions: (1) medium of exchange, (2) unit of account, (3) store of value, and (4) standard of deferred payment. Money sypply
M1, M2, M3: Three measurements of the United States money supply. M1, or the basic money supply, consists of cash in public hands, private checking accounts, credit union share accounts and demand deposits at thrifts. M2 includes all of M1 plus money market mutual fund shares, and savings deposits of less than $100,000 at all depository institutions. M3 includes M2 plus large time deposits at all depository institutions.

Types of Financial Institutions and Their Roles

A financial institution is an establishment that conducts financial transactions such as investments, loans and deposits. Almost everyone deals with financial institutions on a regular basis. Everything from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Here is an overview of some of the major categories of financial institutions and their roles in the financial system. Commercial Banks Commercial banks accept deposits and provide security and convenience to their customers. Part of the original purpose of banks was to offer customers safe keeping for their money. By keeping physical cash at home or in a wallet, there are risks of loss due to theft and accidents, not to mention the loss of possible income from interest. With banks, consumers no longer need to keep large amounts of currency on hand; transactions can be handled with checks, debit cards or credit cards, instead.

Investment Banks Generally speaking, investment banks are subject to less regulation than commercial banks. While investment banks operate under the supervision of regulatory bodies, like the Securities and Exchange Commission, FINRA, and the U.S. Treasury, there are typically fewer restrictions when it comes to maintaining capital ratios or introducing new products. Insurance Companies Insurance companies pool risk by collecting premiums from a large group of people who want to protect themselves and/or their loved ones against a particular loss, such as a fire, car accident, illness, lawsuit, disability or death. Insurance helps individuals and companies manage risk and preserve wealth Brokerages A brokerage acts as an intermediary between buyers and sellers to facilitate securities transactions. Brokerage companies are compensated via commission after the transaction has been successfully completed. For example, when a trade order for a stock is carried out, an individual often pays a transaction fee for the brokerage company's efforts to execute the trade.

Investment Companies

An investment company is a corporation or a trust through which individuals invest in diversified, professionally managed portfolios of securities by pooling their funds with those of other investors. There are three fundamental types of investment companies: unit investment trusts (UITs), face amount certificate companies and managed investment companies. All three types have the following things in common: An undivided interest in the fund proportional to the number of shares held Diversification in a large number of securities Professional management Specific investment objectives

Definition of Accounting Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions, in making reasoned choices among alternative courses of action. Accounting is also defined as the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information. Purpose and Functions To provide quantitative, financial information about economic entities to statement users so that they could make informed judgment and better decision. III. Uses of Accounting Information Accounting is an information system that measures business activities, processes information into reports and communicates the reports to decision makers. A key product of this information system is a set of financial statementsthe documents that report financial information about an entity to decision makers. These reports tell us how well an entity is performing in terms of profits and losses and where it stands in financial terms. IV. Branches of Accounting 1. General Accounting or Financial Accounting- is concerned with the recording of transactions for a business or other economic unit and the periodic preparation of statements from these records. 2.. Auditing- a service rendered by CPAs in public practice who examine records and

statements and express an opinion regarding their fairness. 3. Cost Accounting- emphasizes the determination and the control of costs particularly the costs of manufacturing processes and of the manufactured products. 4. Management Accounting- concerned with the application of appropriate techniques and concepts in processing the historical and projected economic data of an entity, to assist management in setting up reasonable economic objectives and in making rational decisions towards the attainment of these objectives. 5. Tax Accounting- includes the preparation of tax returns and the consideration of the tax consequences of proposed business transactions. 6. Accounting Systems- concerned with the creation of accounting and office procedures for the accumulation and the reporting of financial data. 7. Budgetary Accounting- represents the plan of financial operations for a period and through accounts and summaries, provides comparisons of actual operations with the predetermined plan. 8. Government Accounting- specializes in the transactions of political units with regard to the business aspect of public administration. It mainly focuses on the proper custody of government funds and their purposes. 9. Accounting Education- is perhaps the most obvious field of specialization. In addition to teaching, many accounting professors engage in auditing, tax accounting or other areas of accounting. 10. Internal Auditing- deals with determining the operational efficiency of the company regarding protection of the companys assets, accuracy and reliability of the accounting data, and adherence to prescribed managerial policies. 11. International Accounting- encompasses special accounting for international transactions, comparisons of accounting principles in different countries, and harmonization of diverse accounting standards worldwide and tax requirements of all the countries in which the company does business. 12. Not-for-profit Accounting- deals with special accounting for charitable organizations, philanthropic foundations, religious groups, governmental agencies, schools and cooperatives. They may earn profits but they dont distribute the profits to owners instead it is used for the benefit of the public which they serve. 13. Socio-economic Accounting- concerns the measurement of the impact of business or governmental agencys decision on the public sector. This also includes a specialized study on environmental accounting. The Objective of Financial Statements
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions. Financial statements prepared for this purpose meet the common needs of most users. However, financial statements do not provide all the information that users may need to make economic decisions since they largely portray the financial effects of past events and do not necessarily provide non-financial information. Financial statements also show the results of the stewardship of management, or the accountability of management for the resources entrusted to it. Those users who wish to assess the stewardship or accountability of management do so in order that they

may make economic decisions; these decisions may include, for example, whether to hold or sell their investment in the enterprise or whether to reappoint or replace the management.

1. Components of Financial Statements A complete set of Financial Statement comprises: (a) a balance sheet (b) an income statement (c) a statement of changes in equity, showing either: (i) all changes in equity, or (ii) changes in equity other than those arising from transactions with equity holders acting in their capacity as equity holders (d) a cash flow statement (e) notes, comprising a summary of significant policies and other explanatory notes 2. Classification of Assets and Liabilities The standard requires a financial liability that is due within twelve months after the balance sheet date, or for which the entity does not have an unconditional right to defer its settlement for at least twelve months after the balance sheet date, to be classified as a current liability. This classification is required even if an agreement to refinance or to reschedule payments, on long-term basis is completed after the balance sheet date and before the financial statements are authorized to issue. However, this requirement does not affect the classification of a liability as non-current when the liability has under the terms of an existing facility. 3. Information to be Presented on the face of the Balance Sheet (a) property, plant and equipment (b) investment property (c) intangible assets (d) financial assets (excluding amounts shown under (e),(h) and (i) ) (e) investments accounted for using the equity method (f) biological assets (g) inventories (h) trade and other receivables (i) cash and cash equivalent (j) trade and other payable (k) provisions (l) financial liabilities (excluding mount shown under (j0 and (k) ) (m) liabilities and assets for current tax, as defined in IAS 12 Income Taxes (n) deferred tax liabilities and deferred tax assets as defined in IAS 12 (o) minority interest, presented within equity

(p) issued capital and reserves attributable to equity holders of the parent

Information to be Presented on the face of the Income Statement

(a) revenues (b) finance costs (c) share of the profit or loss of associates and joint ventures accounted for using the equity method (d) tax expense (e) a single amount comprising the total of the post-tax profit and loss of discontinued operations, the post-tax gain and loss recognized on the measurement to fair value less costs to sell or on the disposal of the assets or disposal groups constituting the discontinued operations (f) profit or loss