In accounting and investment, what is the difference and relationship between balance and position
"an account balance is your total in the account.  The word balance means ""to be equal"". The use in finance stem from accounting. However you do not need to know why its called a balance to understand that a balance is equal to something. IE: your ""account balance"" is your total account weather its savings, electric bill, or investment portfolio. A position in your investment portfolio is what you are invested in. IE: If I went 100 shares long(I bought) Apple then I have a 100 share position in Apple. Your position is added to your account balance within your investment portfolio."
Stop with all the stupid big words. You sound really pretentious. Just learn your 3 statements from accounting coach and learn statement analysis from streetofwalls.  If you're interested into valuation, streetofwalls is a good primer for DCF/public comps/M&amp;A comps/scenario analysis (LBO), but if you want to literally build out the model, Joshua Rosenbaum's investment banking valuation book is great. Everyone in banking I know used it to learn valuation "A.1 and B.1 are properly balanced, but ""Business Expense"" is an expense, not an asset. The T entries should be timestamped.  The time should be equal to the time on the credit card receipts.  This will make audit and balancing easier. A or B can be used, but if the the business is to be reimbursed for personal expenses, the accounts should be renamed to reflect that fact. More explicit account names could be ""Business expense - stationary"" and ""Personal expense - lunch"" or even better ""Personal expense - cammil - lunch"".  With a consistent format, the account names can be computer parsed for higher resolution and organization, but when tallying these high resolution accounts, debits & credits should always be used. When it comes time to collect from employees, only accounts with ""Personal expense"" need be referenced.  When it comes time to collect from ""cammil"", only net accounts of ""Personal expense - cammil"" need be referenced. An example of higher resolution, to determine what ""cammil"" owes, would be to copy the main books, reverse any account beginning with ""Personal expense - cammil"", and then take the balance.  Using the entries in the question as an example, here's the account to determine ""cammil""'s balance: Now, after all such balancing entries are performed, the net credit ""Personal expense - cammil"" is what ""cammil"" owes to the business. The scheme for account names should be from left to right, general to specific." Being long something is the same as owning it (generally). Being short something is the same as selling it, with the intention (actually obligation) of buying it back in the future. Being 'short' means that you benefit when the price falls.  A call is the right to buy a financial asset, most often a share, at some price agreed upon now, while the the right extends for some defined time into the future. A put is the right to sell something you already own for some price defined now but the right extends for some period into the future.  A swaption is an option to enter into a swap. A swap is an agreement to trade cash-flows at defined points in the future, usually some fixed rate for some floating rate (say LIBOR+200bps).  EDIT: Clarified puts. The actual financial statements should always be referenced first before opening or closing a position. For US companies, they are freely available on EDGAR.  Annual reports are called 10-Ks, and quarterly reports are called 10-Qs. YHOO and GOOG do a great job of posting financials that are quickly available, but money.msn has the best.  These should be starting point, quick references.  As you can see, they may all have the same strange accounting. Sometimes, it's difficult to find the information one seeks in the consolidated financial statements as in this case, so searching through the filing is necessary. The notes can be helpful, but Ctrl-F seems to do everything I need when I want something in a report. In AAPL's case, the Interest expense can be found in Note 3. Strictly speaking the terms arise from double entry book keeping terminology, and don't exactly relate to their common English usage, which is part of the confusion. All double entry book keeping operations consist of a (debit, credit) tuple performed on two different books (ledgers).  The actual arithmetic operation performed by a debit or a credit depends on the book keeping classification of the ledger it is performed on. Liability accounts behave the way you would expect - a debit is subtraction, and a credit is addition. Asset accounts are the other way around, a debit is an addition, and a credit is a subtraction.  The confusion when dealing with banks, partly comes from this classification, since while your deposit account is your asset, it is the bank's liability. So when you deposit 100 cash at the bank, it will perform the operation (debit cash account (an asset), credit deposit account). Each ledger account will have 100 added to it. Similarly when you withdraw cash, the operation is (credit cash, debit deposit). However the operation that your accountant will perform on your own books, is the opposite, since the cash was your asset, and now the deposit account is. For those studying math, it may also help to know that double entry book keeping is one of the earliest known examples of a single error detection/correction algorithm. "When trying to understand accounting, it's always helpful to reference the balance sheet identity, thus , and debits and credits must balance. In this case, one would So that ""Cash"" is subtracted (credited) from assets, and ""Loans to family members"" is added (debited) to assets. The income identity is treated differently as So, unless if the ""Cash"" and ""Loans to family members"" did not start imbalanced, there was no revenue or expense.  A revenue will be any interest paid.  The expenses will be any costs related to loaning the money such as drafting a contract or any amount defaulted. Assets are not liabilities A liability on the balance sheet is a liability owed by the entity measured, such as a person or a company. The family members in this case are the borrowers, so they are the ones who must increase their liability accounts like so: The lender to family members would not increase liabilities in this case because the lender is not borrowing from the borrower. Debits, credits, and the balance sheet Debits & credits must be equal, or an identity is violated. Debits add to assets and subtract from liabilities (and equity) while credits subtract from assets and add to liabilities (and equity). If a lender were to try to simultaneously subtract cash from assets and add loans to liabilities to book a loan, the operation would look like this This would cause an immediate imbalance because there are no offsetting debits, but more importantly, crediting Loans to family members as a liability would actually mean that the lender owes Loans to family members." There is no difference.  When dealing with short positions, talking about percentages become very tricky since they no longer add up to 100%.  What does the 50% in your example mean?  Unless there's some base amount (like total amount of the portfolio, then the percentages are meaningless.  What matters when dealing with long and short positions is the net total - meaning if you are long 100 shares on one stock trade and short 50 shares on another, then you are net long 50 shares. "1) Are the definitions for capital market from the two sources the same? Yes.  They are from two different perspectives.  Investopedia is looking at it primarily from the perspective of a trader and they lead-off with the secondary market. This refers to the secondary market: A market in which individuals and institutions trade financial securities. This refers to the primary market: Organizations/institutions in the public and private sectors also often sell securities on the capital markets in order to raise funds. Also, the Investopedia definition leaves much to be desired, but it is supposed to be pithy.  So, you are comparing apples and oranges, to some extent.  One is an article, as short as it may be, this other one is an entry in a dictionary. 2) What is the opposite of capital market, according to the definition in investopedia?  It's not quite about opposites, this is not physics.  However, that is not the issue here.  The Investopedia definition simply does not mention any other possibilities.  The Wikipedia article defines the term more thoroughly.  It talks about primary/secondary markets in separate paragraph. 3) According to the Wikipedia's definition, why does stock market belong to capital market, given that stocks can be held less than one year too? If you follow the link in the Wikipedia article to money market: As money became a commodity, the money market is nowadays a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. The key here is original maturities of one year or less. Here's my attempt at explaining this: Financial markets are comprised of money markets and capital markets.   Money is traded as if it were a commodity on the money markets.  Hence, the short-term nature in its definition.  They are more focused on the money itself.     Capital markets are focused on the money as a means to an end. Companies seek money in these markets for longer terms in order to improve their business in some way. A business may go to the money markets to access money quickly in order to deal with a short-term cash crunch.  Meanwhile, a business may go to the capital markets to seek money in order to expand its business. Note that capital markets came first and money markets are a relatively recent development.   Also, we are typically speaking about the secondary (capital) market when we are talking about the stock or bond market.  In this market, participants are merely trading among themselves.  The company that sought money by issuing that stock/bond certificate is out of the picture at that point and has its money.   So, Facebook got its money from participants in the primary market: the underwriters.  The underwriters then turned around and sold that stock in an IPO to the secondary market.  After the IPO, their stock trades on the secondary market where you or I have access to trade it.  That money flows between traders.  Facebook got its money at the ""beginning"" of the process." There are two basic issues here.  First, there is the difference between accounting terms and their dictionary definitions.  Second, once you dig into it there are dichotomies similar to put vs call options, long sales vs short sales, bond yield vs interest rate.  (That is, while they are relatively simple ideas and opposite sides of the same coin, it will probably take some effort to get comfortable with them.) The salient points from the Wikipedia article on debits and credits: In double-entry bookkeeping debit is used for increases in asset and expense transactions and credit is used for increases in a liability, income (gain) or equity transaction. For bank transactions, money deposited in a checking account is treated as a credit transaction (increase) and money paid out is treated as a debit transaction, because checking account balances are bank liabilities. If cash is deposited, the cash becomes a bank asset and is treated as a debit transaction (increase) to a bank asset account. Thus a cash deposit becomes two equal increases: a debit to cash on hand and a credit to a customer's checking account. Your bank account is an asset to you, but a liability to your bank.  That makes for a third issue, namely perspective. "Investing is balancing the desire for return against the various risks that your money is faced with. There's also a recognition that an investment will be in place for some extended period of time. Speculation is seeking short-term maximum return, without protecting yourself against risk.  ""Speculation"" or ""Speculators"" is often thrown out as a pejorative, but you need speculation to have a healthy market." I’m going to answer this because: Accounting books only reflect the dollar value of inventories. Which means if you look at the balance sheet of McDonalds, you will not see how many bags of French fries are remaining at their storage facility, you will only see the total value at cost basis.  Your requirement for noting the number of shares purchased is not part of the double entry accounting system.  When you transfer $10000 from bank to broker, the entries would be:  The bank’s name and the broker’s name will not appear on the balance sheet.  When you purchase 50 shares at $40 per share, the accounting system does not care about the number of shares or the price. All it cares is the $2000 total cost and the commission of $10.  You have two choices, either place $10 to an expense account, or incorporate it into the total cost (making it $2010).  The entries for the second method would be: Now your balance sheet would reflect: What happens if the price increases from $40 per share to $50 per share tomorrow? Do nothing. Your balance sheet will show the cost of $2010 until the shares are sold or the accounting period ends. It will not show the market value of $2500.  Instead, the Portfolio Tracker would show $2500. The most basic tracker is https://www.google.com/finance/portfolio .  Later if you finally sell the shares at $50 per share with $10 commission: Again, the number of shares will not be reflected anywhere in the accounting system. Only the total proceeds from the sale matters. Reading the descriptions on Amazon.com it appears Investments is a graduate text and Elements of Investments is the undergraduate version of the text. Two ways to solve this.  Look at the answer. If the answer says 3 months, then using ceiling for similar questions. You have to act according to the exam conventions, not according to own feelings. Whether or not the answer is reasonable and applicable in real life is out of the question.  Ask yourself, did the investment double after 14 years 2 months? i.e. FV >= 2PV. Does a person who ran 99.72 meters in a 100-meter dash counted as touching the finish line? From what I've seen, balance is great. 10 hour days usually unless things get crazy. But the salary potential seems great too. 100k with bonus as an analyst/associate for 10 hour days seems like a great gig. Plus, you're reporting to the CRO which gives great visibility "Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts. You might have account 1001 (Cash-Checking) and account 1002 (Cash-Savings). In that case, a movement of money between these two accounts should be tracked by a transaction between the GL accounts; credit checking, debit savings. It won't affect your balance sheet, but depending on your definition of liquidity of assets  it might affect working capital on your statement of cash flows (if you consider the savings account ""illiquid"" then money moved to it is a decrease in working capital). Basically, what you are creating with your ""store credit"" accounts for each client is an ""unearned revenue"" account. When clients pay you cash for work you haven't done yet, or you refund money for a return as ""store credit"" instead of cash, the credit is a liability account, balancing an increase in cash, inventory, or an expense (if you're giving credit for free, perhaps due to a mistake on your part, you would debit a ""Store Credit Expense"" account). This can be split out client-by-client in the GL if you wish, avoiding the need for a holding account. The way you want to do it, you'd have a ""Client Holding"" account. It must be unique in the GL and to the client, and yes, it is a liability account. To transfer to holding, you simply debit Unearned Revenue and credit Client Holding, logging the transaction as ""transfer of client store credit"" or similar (moving liability to liability; balance sheet doesn't change). Then, as you sell goods or services to the client, you debit Accounts Receivable and credit Revenue, then to record the payment you credit AR and debit Client Holding (up to its current credit balance, after which the client pays you Cash and you debit that, or the client still owes you). To zero out a remaining balance on the Holding account, debit Client Holding and credit Unearned Revenue. I don't think the Holding account, the way you want to use it, is a good idea. If you want to track each customer's store credit balance with a GL account, then create specialized Unearned Revenue accounts for each client who gets a store credit, named for the client and containing their balance (zero or otherwise). If you don't care about it at the GL level, then pool it in one Unearned Revenue account (have one Store Credit account if you must), and track individual amounts off the books."