The major differences between stock and bonds are as follows −StockPartial ownership of a public limited company is provided in exchange of monetary value.Known as stockholders.No guarantee of return on investment.No fixed profit on investment.Return earned in terms of dividends.Generally purchased through stock exchange.High risk on investment.Maturity time depend on ... Read More

The major differences between debentures and bonds are as follows −DebenturesThe instrument used to raise long term finances.Issued by private companies.Known as debenture holders.Short term tenure.Debentures = assets – (Liabilities + shareholders reserve+ Bonds).They are both unsecure and secure in nature.High risk.Gives high interest rate.Liquidity is done after bond holders.Periodical ... Read More

The major differences between shares and debentures are as follows −SharesDebenturesOwned funds of the company.Represents capital of the company.Known as shareholders.Will get dividends.Deduction is not allowed.No security for payments.They have voting rights.Can’t be converted to debentures.No trust deedAppropriation of profit.High risk.Don’t lien on asset of the company.Don’t have leverage benefits.Disclosed ... Read More

The major differences between preference shares and debenture are as follows −Preference sharesDebenturesCapital funds of the company.Represents capital of the company.Shareholders are owners.Paid out of profits earned.Indirectly dilute the control of existing shareholders.Dilution in profit sharing percentage.Not tax deductible expenses.No tax benefits on preference capital.Effect on authorised capital.Blockage of funds ... Read More

The major differences between equity shares and preferred shares are as follows −Equity sharesPreferred sharesMain source for fund raising.Long term financing.No redeem ability till lifetime of company.They have ownership right.Received dividend at fluctuating rate.Paid at end, in case of insolvency.They have voting right.They can’t be converted.Risk is high.Dividend share is ... Read More

The major differences between capital expenditure and revenue expenditure are as follows −Capital expenditureRevenue expenditureExpenditure incurred in enhancing the current one or buying the new one.It’s a long term expenditure.Lump sum amount is required.Amount is capitalized.Reflects in balance sheet.It’s a non- recurring in nature.Improves earning capacity.Expenditure is not matched with ... Read More

The major differences between accounting and bookkeeping are as follows −AccountingBookkeepingIncludes summarising, analysing, interpreting and communicating.Language of business.Balance sheet, profit and loss account and cash flow statements.Financial accounting, cost accounting, management accounting, human resource accounting, social responsibility accounting.Helps in taking critical decisions based on information.Plays a part in preparing financial ... Read More

The major differences between accounting and financial management are as follows −AccountingFinancial managementIt is a process of identifying, recording, measuring, classifying, verifying, summarising, interpreting and communicating financial information.Primarily used by both internal and external users.It reports financial related information within specific rules and principles.Accrual basis of fund.Prepared quarterly, half-yearly and ... Read More

The major differences between cost accounting and financial accounting are as follows −Cost accountingRecords information related to production activities.Records both historical and forecasted costs.Main objective is fix selling price of the product by calculating per unit cost.Both monetary and non-monetary transactions are recorded.Prepared whenever is necessary.Not necessary to prepare any ... Read More

The major differences between cash accounting and accrual accounting are as follows −Cash accountingRevenue and expenses are recognized when it’s made through cash only.Simple and intuitive.Not recognized by GAAP.No holistic approach.Tax are not paid for money yet to receive.Mostly used by small business or sole proprietors.Focus on liquidity.Not more accurate.Helps ... Read More