...always equal to the capital plus the liabilities of the business. Assets = Capital + Liabilities ▪ A balance sheet is a statement of the financial position of a business and a certain date. Chapter: 2 Double Entry Bookkeeping- Part A ▪ Every transaction must be entered twice-on the debit side of one accounting and on the credit side of another account. ▪ The debit entry is made in the account which is receiving the value and the credit entry is made in the account which is giving the value. ▪ Each type of asset, liability, expense and income has its own ledger account. ▪ Any value taken from the business by the owner of the business is known as drawings. ▪ At the end of the period, the accounts of assets and liabilities which contain more than one entry should be balanced. ▪ The entries for purchases and sales and purchases returns and sales returns are recorded in separate accounts. ▪ Carriage is the cost of transporting goods. Chapter: 3 Trial balance ▪ A trial balance is a list of the balance on the accounts in the ledger at a certain date. ▪ A trial balance is prepared to check the arithmetical accuracy of the double entry bookkeeping. ▪ If a trial balance fails to balance, it indicates that an error has...
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...1. Why banks are called financial intermediaries? When you have money they can act as your agent for using or protecting that money. What are financial intermediaries? Is a financial institution ( such as a bank, credit union, finance company , insurance company, stock exchange, brokerage company) which acts as the middleman between those who want to lend and those who want to borrow. Examples of other intermediaries? Depositary Intermediaries are those that get funds from the public and use them to finance their business. Non depositary Intermediaries are those that do not take or hold deposits. 2. What types of banks are there? How do they differ from each other? Commercial bank; one of the big distinctions between commercial banks and other depository institutions is that commercial banks are owned by stockholders who expect a profit on their investments. Savings and Loans Associations; they receive most of their deposits from individuals. Charted by either state or federal governments, these institutions grew by focusing on real-estate lending for people. Mutual Savings Bank; receive deposits primarily from individuals and concentrate also on private real- estate mortgages. Mutual savings bank or owned by depositors as well. These state charted banks are sometimes granted greater powers with regard to assets and liabilities than S&Ls but usually not as much as those of commercial banks. Credit Unions; are also owned by depositors, but there are a couple of key differences...
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...Chapter 03 Balance of Payments True / False Questions 1. Over half of all dollar bills in circulation are held outside American's borders. True False Multiple Choice Questions 2. The current account balance, which is the difference between a country's exports and imports, is a component of the country's GNP. Other components of GNP include A. consumption and investment and government expenditure. B. consumption and government expenditure and net exports. C. consumption and net exports and government expenditure. D. consumption less imports. 3. If the United States imports more than it exports, then this means that A. the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus. B. the demand for dollars is likely to exceed the supply in the foreign exchange market, ceteris paribus. C. the U.S. dollar would be under pressure to appreciate against other currencies. D. both b) and c) are correct 4. Balance of payments A. is defined as the statistical record of a country's international transactions over a certain period of time presented in the form of a double-entry bookkeeping. B. provides detailed information concerning the demand and supply of a country's currency. C. can be used to evaluate the performance of a country in international economic competition. D. all of the above 5. If a country is grappling with a major balance-of-payment difficulty, it may not be...
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...Accounting Cheat Sheet Visit our website online at: http://www.AccountingCoach.com Learn more about AccountingCoach Pro: http://www.AccountingCoach.com/pro/ For personal use by the original purchaser only. Copyright © AccountingCoach®.com. Click a Category Below Financial Statements Balance Sheet Income Statement Cash Flow Statement Stockholders’ Equity Financial Ratios Accounting Principles Bookkeeping, Debits and Credits Accounting Equation Adjusting Entries Bank Reconciliation Petty Cash Accounts Receivable and Bad Debts Expense Inventory and Cost of Goods Sold Depreciation Accounts Payable Cost Behavior and Break-even Point Payroll Accounting Standard Costing Accounting Pronouncements Organizations Pages 1 1-2 2-3 3 4 4-5 5-6 7-8 8 9 9-10 10-11 11 12 12-13 13 14 14-15 15-16 16-17 17 For personal use by the original purchaser only. Copyright © 2011 AccountingCoach®.com. AccountingCoach.com’s Accounting Cheat Sheet is a quick reference and overview of accounting concepts. You should consult a professional accountant and/or the accounting profession’s official pronouncements for specific situations and for more complete information. FINANCIAL STATEMENTS Financial statements are general purpose, external financial statements prepared according to generally accepted accounting principles. Some terms that apply to the financial statements include: balance sheet reports the amounts of assets, liabilities, and stockholders’ equity at a specified moment...
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...Accounting Cheat Sheet Your AccountingCoach PRO membership includes lifetime access to all of our materials. Take a quick tour by visiting www.accountingcoach.com/quicktour. Table of Contents (click to navigate) Financial Statements 3 Balance Sheet 4 Income Statement 5 Cash Flow Statement 6 Stockholders’ Equity 7 Financial Ratios 8 Accounting Principles 9 Bookkeeping, Debits & Credits 10 Accounting Equation 11 Adjusting Entries 12 Bank Reconciliation 13 Petty Cash 14 Accounts Receivable & Bad Debts Expense 15 Inventory & Cost of Goods Sold 16 Depreciation 17 Accounts Payable 18 Cost Behavior & Break-even Point 19 Payroll Accounting 20 Standard Costing 21 Accounting Pronouncements 22 Organizations 23 AccountingCoach.com’s Accounting Cheat Sheet is a quick reference and overview of accounting concepts. You should consult a professional accountant and/or the accounting profession’s official pronouncements for specific situations and for more complete information. For personal use by the original purchaser only. Copyright © AccountingCoach®.com. 2 Financial Statements Financial statements are general purpose, external financial statements prepared according to generally accepted accounting principles. Some terms that apply to the financial statements include: balance sheet reports the amounts of assets, liabilities, and stockholders’...
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...the validity and reliability of their financial statements. Bank reconciliation is a critical piece of accounting information on a business's cash balance. The term reconciliation refers to reconciling the cash balance reported in a business's bank statement with that shown on the business's own cash records. Differences between a bank's record of cash and a business's record often exist because of the reporting time delay from when a business deposits or writes checks to when a bank clears the checks and records them. Cash reporting differences may also result from the time lapse during which bank charges and credits remain unknown to a business until a bank statement becomes available. Each month, a business must perform a bank reconciliation to determine the correct cash balance, and auditing the bank reconciliation ensures that the reconciled cash balance reflects correct adjustments. Step 1 Test mathematical accuracy. A bank reconciliation is a working paper in which a business applies various adjustments, such as deposits in transit, outstanding checks, bank charges and credits to both a bank statement balance and a book recording balance and find agreement between the two sets of cash records. In auditing bank reconciliation, the auditor always performs a basic arithmetic test to ensure that cash additions and deductions made to bank and book balances are mathematically correct. Step 2 Confirm bank and book balances. While some auditing work focuses on detecting...
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...is “An Overview of Credit Management by Sonali Bank Limited”. This report is based on study carried out on Credit management of Sonali Bank Limited using both qualitative and quantitative methods. The aim of the study is to find out the credit control system performed by Sonali Bank Ltd. The scope of this report is limited to the overall description of the company, its services and its financial performance analysis. The scope of the study is limited to credit management, functions, and performances. The report will mainly focus on SBL’s credit offer and is control and management. 1.3 Objectives of the report: The purposes of this report relates with the internship. The internship objective is to gather practical knowledge and experiencing the corporate working environment. To this regard this report is contemplating the knowledge and experience accumulated from internship program.. The objectives behind the construction of this report are: To know the practical implication of credit management. To have an in depth knowledge of Credit management procedure of Sonali Bank Limited. To justify how a bank effectively employ procedures to judge creditworthiness of prospective and existing borrower. To differentiate between practical and theoretical learning To observe the performance of the bank over a certain time period 1.4 Methodology: As the Topic of the report was Credit management, so I needed to collect information regarding the credit control procedure. ...
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...Access to Credit for SMEs: A study on Chitwan Based Enterprises Kapil Deb Subedi, HOD, Department of Management Saptagandaki Multiple Campus, TU Abstract Access to credit is crucial for the growth and survival of Small and Medium-sized Enterprises (SMEs). Thus policy makers attempt to pursue financial sector policies to propel financial intermediaries to extend more credit to SMEs. Access to credit still remains a challenge to SMEs especially those in developing economies and continues to dominate discussions both within business circles and policy makers. In Nepal, for instance, a survey by Ferrari et al (2006) entitled to “Access to financial services in Nepal” indicated that lack of adequate access to credit topped factors hampering the growth of small businesses in Nepal. The general objective of this study is to explore the situation of access to finance of SMEs for their innovation and entrepreneurship. It also examines the firm specific attributes of access to bank credit in Nepal by focusing on SMEs in the Chitwan District. The study employed the quantitative approach to research in which the convenience sampling criteria was employed to select seventy-two small firms from the Bharatpur Municipality of Chitwan district. The major findings for the study indicated that there exist significantly, positive relations between certain attributes of a firm and access to credits. There are also, some firm specific attributes such as industry sector, size, collateral...
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...Understanding customer behavior in retail banking The impact of the credit crisis across Europe February 2010 Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The impact on trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Loyalty: the end of an era? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Reasons customers look elsewhere Measuring satisfaction Conclusion 8 How Ernst & Young can help . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Introduction ...
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...Chap1 Glossary (See related pages) | | | Central bank | The financial institution that manages the government's finances, controls the availability of money and credit in the economy, and serves as the bank to commercial banks. | | | | European Central Bank (ECB) | The central authority, located in Frankfurt, Germany, which oversees monetary policy in the common currency area. | | | | Federal Reserve System | The central bank responsible for monetary policy in the United States. | | | | Financial institutions | Firms, such as banks and insurance companies, that provide access to the financial markets, both to savers who wish to purchase financial instruments directly and to borrowers who want to issue them; also known as financial intermediaries. | | | | Financial instrument | The written legal obligation of one party to transfer something of value (usually money) to another party at some future date, under certain conditions. | | | | Financial market | The part of the financial system that allows people to buy and sell financial instruments quickly and cheaply. | | | | Financial system | The system that allows people to engage in economic transactions. It is composed of five parts: money, financial instruments, financial markets, financial institutions, and central banks. | | | | Information | A collection of facts. The basis for the third core principle of money and...
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...related to recognition of accounts receivable. 5. Explain accounting issues related to valuation of accounts receivable. 6. Explain accounting issues related to recognition and valuation of notes receivable. 7. Explain the fair value option. 8. Explain accounting issues related to disposition of accounts and notes receivable. 9. Describe how to report and analyze receivables. *10. Explain common techniques employed to control cash. *11. Describe the accounting for a loan impairment. *12. Compare the accounting procedures for cash and receivables under GAAP and IFRS. CHAPTER REVIEW 1. (L.O. 1) Chapter 7 presents a detailed discussion of two of the primary liquid assets of a business enterprise, cash and receivables. Cash is the most liquid asset held by a business enterprise and possesses unique problems in its management and control. Receivables are composed of both accounts and notes receivables. Chapter coverage of accounts receivable places emphasis on trade receivables. In covering notes receivables, the chapter includes both short-term and long-term notes. Nature of Cash 2. Cash consists of coin, currency, bank deposits, and negotiable instruments such as money orders, checks, and bank drafts. Cash that has been designated for some specific use, other than for payment of currently maturing obligations, is segregated from the general cash account. This amount may be classified as a current asset if it will be disbursed...
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...before payment 2. It is not a bank draft A. promissory note B. checks C. money orders D. bill of exchange E. documentary collections 3. B/E represents: A. unconditional order in writing to pay a specified amount of money to a specified person or to the bearer, upon presentation of the bill at a specified future date B. an order given to the bank in order to pay a specific amount to a person from the company current account against the presented bill C. an order given by a person to its bank in order to pay a specific amount directly in the beneficiary’s account D. a written promise to pay a determinate sum of money made between two parties 4. This is not a benefit for the importer when he use a payment based on the letter of credit: A. reliance on issuing bank’s credit rather than buyer’s B. documentary evidence that the ordered goods have been shipped on time C. payment deferred until goods are shipped and documents presented D. assurance that necessary clearance documents will be provided 5. A clean L/C means that: A. the L/C can not be revoked without the specific permission of all parties involved, including the exporter B. the L/C is issued by a bank and confirmed by another, obligating both banks to honor drafts drawn in compliance C. the place where the payment is realized by the exporter bank D. the documents are presented without other additional documents or notifications 6. In the case of open account payment A. the goods available to...
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... What is a Repo Rate? A: Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive. 2. What is Reverse Repo Rate? A: This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates. 3. What is CRR Rate? A: Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.3 4. What is SLR Rate? A: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage...
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...INTRODUCING THE BOP CONCEPT: 1.1) Brief History 5 1.2) Basic Definition 5 1.3) System of Recording 7 1.3.1) Identifying Transactions 7 1.3.2) The Debit & Credit System 9 2- GENERAL STRUCTURE OF THE BOP: 2.1) Main Components 12 2.1.1) Current Account 12 2.1.2) Trade Balance 15 2.1.3) Capital Account 16 2.1.4) Financial Account 18 2.1.5) Errors & Omissions 22 2.2) Complications 23 2.2.1) Accounts Interrelation 23 2.2.2) Deficit & Surplus Dilemmas 25 3- BOP FROM EQUILIBRIUM TO DISEQUILIBRIUM 3.1) BOP in Equilibrium 27 3.1.1) Equilibrium Conditions 27 3.1.2) Equilibrium Model 27 3.1.3) Types of Equilibrium 29 3.2) BOP in Disequilibrium 29 3.2.1) Causes of Disequilibrium 29 3.2.2) Types of Disequilibrium 32 3.2.3) Consequences of Disequilibrium 33 3.2.4) Measures to Eliminate Disequilibrium 33 3.2.5) Demonstrating Disequilibrium 35 4- STUDYING THE LEBANESE BOP 4.1) Historical Events: 1999 and before 37 4.2) Major Events of the Decade: 2000-2008 38 4.3) Recent Events: 2009-2010 40 5- CONCLUSION Importance of BOP 44 1- INTRODUCING THE BOP CONCEPT 1.1 Brief History The balance of payments (BOP) basically measures the payments that flow between any individual country and all other countries. Historically these flows simply were not carefully measured, and the flow proceeded in many commodities and currencies...
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...3.2.1. Overdrafts/Credit Cards etc. Conventional banks offer the facility of overdrawing from account of the customer on interest. One of its form is use of credit card whereby limit of overdrawing for customer is set by the bank. Credit card provides dual facility to customer including financing as well as facility of plastic money whereby customer can meet his requirement without carrying cash. As for facility of financing is concerned that is not offered by Islamic banks except in the form of Murabaha (which means IFI shall deliver the desired commodity and not the cash) however facility to shop/meet requirement is provided through debit card whereby a customer can use his card if his account carries credit balance. Under conventional banking a customer is charged with interest once the facility availed however under Murabaha only profit is due when the commodity is delivered to the customer. Furthermore in case of default customer is charged with further interest for the extra period under conventional system however extra charging is not allowed under Murabaha. (Vol. 2 No. 2; February 2011, pg 170, Differences and Similarities in Islamic and Conventional Banking Muhammad Hanif) Credit cards can offer certain advantages to the holder. Firstly, they provide easy means of obtaining credit for an interest free credit period from a week to a mouth. Secondly, credit card can easily be used to withdraw cash over the counter or from an Automated machine (ATM).Furthermore...
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