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Learn about asset & liability basics

Learn about Asset & liability basics

Knowledge of accounts can make life much easy. If you are to invest in a new business or joining your forefather is business, planning to take some loan, looking for job in any marketing company, desire to be the manager of a multinational company or have the onus to manage your own assets and liabilities, knowing some basics of accounts becomes mandatory.

Broadly, accounting is bifurcated into two categories

Cash Bases Accounting

Accrual Accounting

The Cash Based accounting pertains to the management of an individual is personal monetary transactions. In this case, he keeps a track of the money he withdrew, deposited, gave or received from someone etc. This accounting comes to life when actual cash transactions take place.

The Accrual Accounting requires an accountant who notes the transactions even if no money has been actually exchanged. This method works on the principle of comparing or seeing the ratio of the expenses to expenditure. If the expenditure is more, you need to cut down your luxuries, if not then it is always good to have some savings for future. This type of accounting tells you the amount that you owed. this might not match with the figure of your bank balance.

In the language of accounting there are several key terms that one needs to be familiar with. Some of the crucial ones are discussed below

The Assets the assets are generally those possessions of an individual that have a good market value or are quite valuable. Assets are mainly classified into three types
Current Asset the cash is the most basic asset of any individual. The money that is being held in accounts like the checking and savings accounts is also included in the cash. Also inclusive are the marketable securities in the form of bonds, stocks, shares etc. The money lent or payments due from client is even form a part of it.

Fixed Asset comprises of all the tangible valuable things like property, machines, equipment, land and the like that are not meant to be sold.

Intangible Asset incorporates all the untouchable things like copyrights, patents, trademarks etc. that have tremendous monetary significance.

The law of opposites governs the nature. where there are assets, there will be liabilities. These are the debts that you have to pay back to your creditors. This can be done through giving cash or any other asset like jewelry, some other goods etc. Liabilities again are of two kinds

1. The Current Liabilities the liabilities that are to be paid back within a certain time limit and most often through your current assets. These include the accounts payable i.e. type of bill that you have to monthly, the Notes Payable loans taken from banks meant to be repaid within 30 days and the Accrued Expenses the compulsory expenses like taxes, wages, interests etc. where the bills are not received but the balances of each must be repaid.

2. Long Term Liabilities those debts that can be repaid at ease for the tenure is more then a month.

The Financial Capital is the economic capital. It is any liquid medium or merchandise that stands for wealth or other styles or capital. There are four ways to manage and display the financial capital. First, this capital is needed when a contract is made with any sort of capital asset. The financial instruments work in the form of currency in case of sale, purchase or trade of goods i.e. the medium exchanges. Second, it works as a settled medium or mode like gold for the
Standard of Deferred Payment. Third, The Unit of Account has a market value attached to it which in turn varies with the economy of the country. Fourth, The Source of Value is concerned with financial capital that needs to be saved and recovered. It is a collection of things like gold, real estate, collectibles etc.

Petty Cash is an important factor in business. It is the smallest account within a business setting or the cash in bills and coinage required to pay little expenses.

Types of Business there are several kinds of business one should be aware of like

Sole proprietorship where a single individual who starts the business owns it too.

Partnerships the companies or businesses started by two or more persons where they conjointly own it.

Corporations involve lot many shareholders or investors who are responsible in taking decisions for the company.

Limited Liability Companies can be said to be sisters of corporations. Here the business members are not under a legal obligation to pay the debts if the business fails.

Payrolls the term payroll designates the manner in which you will be paying the employees of your company and even yourself. Many multinational companies cater to payroll service provider companies that do the work quite efficiently.

These are some of the broad guidelines that will help you grasp the basics of accounting. It is essential to have some such wisdom for accounts, as it is fruitful in all walks of life.

Is there still enough appetite for ipos

Is There Still Enough Appetite for Ipos ?

Reliance Energy has gone all out to woo investors for the initial public offer (IPO) of its subsidiary, Reliance Power. It offered shares to retail investors at a 5% discount to the price band of Rs 405-450, and “staggered payment” option in this IPO.

Accordingly, retail investors need to pay only 25% of the total investment amount at the time of submitting the application and the rest at the time of allotment on first call,

This option brings a level playing field for retail investors vis-?-vis qualified institutional buyers(QIBs), who are allowed to bid in an IPO with just 10% margin while submitting the bids in a public issue. Prominent public issues, which enabled the staggered payment options in recent times include ICICI Bank and Reliance Petroleum.

In an IPO , for the retail investor there is an option where an applicant can withdraw their applications anytime before allotment of shares / securities by the company ,as there is a demand from the public to withdraw from the Reliance Power IPO , before its listed, seeing the adverse market situation.

According to SEBI Guidelines, in an IPO, companies invite applications for shares sought to be enlisted by them in a Stock Exchange. The subscription in an IPO can either through book-built process by inviting bids from the prospective investors or on a fixed price basis. Issue of securities in an IPO is, inter alia, governed by SEBI (Disclosures and Investors Protection) Guidelines, 2002 – popularly known as SEBI DIP Guidelines.

SEBI DIP Guideline at Para no 11A.7.7 also provides that an applicant can withdraw applications in a public issue. Thus, in a book-built issue the applicants can withdraw their applications anytime before allotment of shares / securities by the company. This is emanating from the fundamental principle under Law of Contracts that an offer can be revoked before acceptance. The bids made by the bidders (applicants) is an offer made and allotment of securities by the companies only brings into a binding contract between the bidder and the company and, therefore, an application in a public issue can be withdrawn by the applicant depending upon the market scenario post subscription/closure of the IPO but before allotment even if the application money has been realized by the company. However, as per Clause of the SEBI DIP Guidelines, only Qualified Institutional Bidders (QIBs) are not allowed to withdraw their bid after the closure of the bid. This is to prevent any possible manipulation of the IPO subscription by the QIBs.

Instances have happened in our country where investors have withdrawn their applications in an IPO. IPO made by Purvankara Projects, Deccan Airlines, Cairn Energy, Housing Development Infrastructure Limited, IVR Prime, KPR Mills, have seen withdrawal of applications by retailers and HNI categories before allotment.

How to maintain, clean, and keep your oriental rug looking at its best

How to maintain, clean, and keep your Oriental rug looking at its best

You’ve just bought an Oriental rug and it really ties the room together. Now you probably want your new rug to last years to come. No problem. You just have to follow a few simple instructions in order to make the most out of your rug’s life and durability.

Of course that there are some issues that can not be avoided. Rugs, unlike most of our purchases, are made to be walked on. So the best and first thing to do is to ask your family to remove their shoes while in the house. Most of the dirt and wear of rugs is a direct result of the surprises we carry on our soles (by the way in Persia, nobody keeps their shoes on while inside).

But still, there are guests and pets and kids and food and you don’t really know what the cat’s going to drag in tomorrow.


Although Oriental carpets come from a land of a thousand suns, rugs do not like direct sunlight and they tend to fade out. So just like you do with your mattress, try to rotate the carpet from time to time and prevent wear and color fade from happening in the same areas. Rotating a carpet a couple of times a year can help you maintain the rug’s value and look.

Vacuum Regularly

Vacuum rugs often, and do it on both sides. Try to use the vacuum nozzle instead of a beater bar and whatever you do – don’t shake them! Shaking Oriental rugs leads to thread and knots damage. When you vacuum, don’t skip areas that are hidden under furniture. Moths love those dark, quiet places and moths’ eggs just love to consume rugs.

Know Rug First Aid

There’s nothing to do about it – sooner or later a glass of wine will spill, coffee will drip, the kid’s soda, and the dog that couldn’t wait… It is very important to master the rules of rug first-aid and act as quickly as humanly possible in order to prevent stains and heavy smells. Before the spill begins to dry, clean the area with a wet paper towel. Then use a mix of water and vinegar if you want to prevent color damage.  

Get a Rug Pad

A rug pad is also recommended and can help prevent slippage, act as a buffer to minimize abrasion and protect your floors. A good quality pad will also provide airflow between your floor and the rug and airflow allows the rug to breathe, which in turn will extend the rug’s life. Rug pads may also prevent the crushing and wearing of pile after heavy use.

Original Oriental rugs can be a smart investment if you keep them in a good shape. Your rug will increase in value, since well maintained rugs are harder and harder to find these days. If you still need help with your rug cleaning or restoration, turn to a professional Oriental rug dealer such as www.1800GeatA Rug.com where you will find experienced importers and wholesalers of beautiful rugs from all over the world.

Whether you are looking for a Persian Antique or Semi-Antique, Fine New Oriental Rugs, 19th century European designs or modern area rugs, log on to www.1800GetARug.com where you will find a unique collection of beautiful handknotted rugs which is always up to date with color and design.

www.1800GeatARug.com are experienced importers and wholesalers of beautiful rugs from all over the world.