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Bhu M. Com Notes

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Neeraj yadav
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71 views

Bhu M. Com Notes

Uploaded by

Neeraj yadav
Copyright
© © All Rights Reserved
Available Formats
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Meaning of Accounting identifying, measuring a ‘and concepts are used \ccounting requirements, interpreting etc fin I Accounting records the transactions in terms of money . Accounting is the secondary stage. It starts where b Its aim is to ascertain net results of ‘communicate information to the intersted parties, Communicate information to the intersted parties. — | 3y Fields of Accounting : jor fields ervices to the public, directing the activittes“of-the—accounting personnel, Se of private and public accountants. us partic; and financial position and to Fundamental Accounting Equation : Jn accounting, the resources owned by a Accounting has been rightly called * language of business” because accounting terms. to describe the events that make i istence 0 Sa performs various functions like recording, communicating, mecting legal Characteristics of Accounting : (y-Accounting is an_art which helps in attaining the objectives of ascertaining the ping ends, “follows: (1) Bublic Accounting : Public accounting practice in firms that offer their professional (2) Private Accounting >“An accountant working for a single business is said to be accoun pasibiles of Such SeTOUUnE TE employed in private accounting. The responsibilities of Sucl (9) Goverment Besaunting —. By Closing Stoc By Abnormal Loss of stock =~ By gross Loss transferred. to P&L A/e ee oO Return Outwards To Direct Expenses u-* To Wages and Salaries ~~ To Freight Inward 4 ,To Carringe Inward ~~ To Gross Profit transferred to P&L A/c es Total 2 “wate Peed a Ae chow, = cloth, . Se ceoonl tg see Seen ‘ aa OSL OTA lal men! Profit and Loss Account: It i: siti siness during.an_accountiny fo ASCel ‘oF et loss it y the business entity during an accounting period, Profit and Loss Accounts for the period Ending.... ¢ financial statements which show the financial Dr Particular Re Particular “To Gross Loss b/d = | By Gross Profit b/d, = * To Salaries and wages —-~ By Interest Received To Rent, Rotes and Taxes. ~ By Commission Received To Repairs and Maintenance — By Rent Received, To Depreciation ~~ By Profit on sale of Fixed Assets4 To Audit Fees w~ By Income from Investments: To Legal Charges! By sale of Scran—~ To Insurance en By Net Loss transferred ta=~ To Discount Allowed“ Capital Acgount (balancing To Carriage Outward figure) To Lighting To Postage and Stationery To Provision for Bad Debits” To Net Profit transferred to Capital we Account (balancing figure) Total | wane Total Balance Sheet: It is one of ncial_statements_ whi nt the position of assets and abilities of an i n_date. It is prepared to find out the financial solvency of an enterprise —— Its format is: Balance Sheet ....... As at. Liabilities ‘Amount [Assets — ‘Amount ‘Current Liabilities » ‘Current Assets : Bank Overdraft ~~ 7 . | Cash-in-Hand ~~ Bills payable. ~ Cash-at-Bank Outstanding Expenses Bills Receivable Sundry Creditory Sundry Debtors ~~, Income Received in Advance” | vunnnn | Prepaid Expense: Long-Term Liabilities | AGS Loan i Capital Investments ~~ + Opening Bplance Wised Assets: Furniture and Fixture Plant and Machinery Land and Buiding, oO Dexwings |. + | Goodwill 7 Total () Net Profit/() Net Loss Organ salon rae i izations include concerns, lubs, (Saning of Non-Profit tention: These ype of organelle Ty aod cultce a iy accounts ‘educational institutions, ‘charitable hospitals, socictics ( ie5e undertakings do not carry on trading and thus, don which shows the criod, Its forma the beginning and at the end of an accountiny nding one Receipts and payments Account for the period E: Besoints Ra Payments 5 Re Pears b/d By Balance b/d (Bank Qverdraft) Cash .. | By Salaries and Wages. By Rent, Rates and Taxes By Insurance - Bank z By Furniture To Subscription: By Sports Equipments for previous Year By Audit Fees- ae By Printing and Stationery By Honorarium,- oo for Current year By Bank Changes ~ By Sundry Expenses By 12% Investments By Balance ¢/d- Cash , for Next Year To Entrance Fees To Donation for Building ~ To General Donations ~ To Life Membership Fees - ‘To Legacy “ To Dividend ‘To Rent To Sundry Receipts- ‘To Balance ¢/d (Bank Overdraft “ erotall | Total |... 1SceetpheZ—moyments ale = Asset Al (Real i ely ing Be of 4 ae i) i Accountinn Peiltacl « ge es anette 0) ‘4 Reais and payments Account: is asc accor Sy bank bales classified summary of transactions of a cash book alon fad ic halances i \ VA = = (ayfaicome and Expenditure Account: [tis a mrenuutaccaunt (or nominal accauny) which shows, the classified summary of revenue incoimes, revenue expenses and losses for-current accounting period along with surplus or deficit. Its format is: Income and Expenditure for the Year Ending on.. Expenditure Rs. Tacome ri Rs coe Salatisa, By Subscription Received _ a (*) Outstanding at the End ¢ at_the End (+) Advance at ‘ (+) Advance in the Beginning (-) Outstanding irrtheBeg,- By Rntrance Fees*7—~ By General Donations .~ By Life Membership Fees*_- By Dividend and Interest By Sundry Recelpis By Profits from Annual Dinner- Contribution... (+) Outstand’ (J Prepaid at the End ee (+) Prepaid at the Beginning (-) Outstanding in the Beg. 79 o Rent, Rates and Taxes — To insurance Premium =~ ‘To Depreciation on Furhiture— () Expenses se and Sport Equipment By Sundry Receipt. To Audit Fees To Printing and Stationery - By Deficit balancing figure) To Honorarium = ~~ To Bank Charges To Sundiy Expenses ~ To Blectricity and Water To Surplus (balancing gure) “=Total Total *Only that portion of entrance fees and life membershi be taken into account which Toh conta ene a (3) Balance Sheet : The balance sheet of non-1 concerns is prepared on the same lin that of a trading cone SS Srna SE Aut de ‘Showing assets on Snes ek a fe Hight side and. peepee oe tne el ideal contains | ‘alTassets and liabilities including capital fund as on a particular date. ——— Neorte £+ EXPENDITURE Alay om TIS “seuenve SIC 0 rival ale.) Representativ “Ram, Shyam, —Repiesentative persoWs-c7 -~pbplicalian-A/<-» Drawing A/t__sharc_alloumcnL./ * Real Accounts ; refers to which mmearmece Machinery, Fumiture, Investments Patent, Trade Mark, Tand & Buy id & LUNGIBES Fe aes a — . 75 & Income c, Nominal Accounts : are | 08s i aa for to expen 19805 sergeant Salary,-Impori duty, rigringe- oulwausl Durchasty-5: Provision for Ba flataion Aocount » Mnother category &: es Provision-for E Semrpoubinir penis * Acceptanci™ The draue's signed assent on a bill ob exchanges tt se onder of the drawer. This term_is also used to descr exchange that e ‘Recount Receivable : Sundry Debtors_/_ Bills Receivable, icles : The specific accounting Principles and_methods of applying those ration financial les adopted by ap enterprise in the preparation 8 present Statements. + Accrual Basis of Accounting : of recording transactions by which revenue, _costs, aascts & liabilities are reflected in the accounts in the peri hey. Taccure. The accrual basis of xccunting includes considerations relating to_deferals,, “allocations depreciation and amortisation, Also known as Mercantile Basis. » ‘Accrued / Asset : A devioping but not yet enforceable clai Which accumulates with the passage of time or rende1 thay arise from the rendering of service [including the-usé-of money] which at the date of accountmg nave been, performed and not yet billable. —-~ been incured in_an_accouiting period but * Accrued Expenses :An expenses whit for which no enforced * Accrued Liability : A developing but not vet enforceable claim by anothey which ‘accumlates with the passage of time or the receipt of service of otherwise. y oT nace amp tip nia Sk Me teen eared a abe in SE unting period: ba + Accumulated Depreciation ; The total to date of periodic depreciation charges on. depreciable assets + Actual cost cunt of expenditure incurred on or attributable to a specified ater ct, or activity. - Amortisation : The gradual and systematic writing off of an asset or an accouint aves an appropriate peffod, » Annual Report : The information provided annually by the management of an enterprise to the owners & other infaresial persons concenting te operons & finaneal poston tn-cage of mpany..P/L A/c. Balance Shéet & Notes on Accounts, Auditors Report thereon. * Assets : Tangible objects or intangible Rights owned by an enterprise and cartying, probable Future benefits, 3 ESE Authorised Share Capital : The number & par value of each class of sharés that an enterprise may issue in accordance with its instrument of incorporation, This is known as Nominal Share Capital. Bills Receivable Book : Records Entries Regarding Bills Receivables ~ a eee * Bills Payable Book : Records all bills which are accepted and_payable by a business book, + Bad Debts : Debts owed to an enterprise which are considered to be irrecoverable, + Balance Sheet : A statement of the financial-position of an enterprise_as ata given date, which _ exhibits its assets, liabilities. Capital, Reserves & other account balances at their respective Book iti x have thr jes - Drawer - who draws the bill _ Payee - tow] tioned in the bill is payable. Gross Cagis joa tathy ccnterprige in its fixed assets, investment work al Which means.total of As i rth * Capital Profit |: E f the proceeds realised from the sale, Ty ror exchange of the Whble“or, part of’ Tong term assets over its cost, }+ | Redemption Reserve JA reserve created by an enterprise for redemption of redeemable preference, four it gias dividend,/ + Cash Book Records all transactions in cash or by cheques. —— FIFO - First 3 piece c Sea oniions ie statements, of current Nesey “Sheet at current Frees, When prices are Tallfag this method waive better ToS ive bewer fesue (ConsigneeLeither, * Consignment - Despatch of goods. rincipal ( i.e. consignor) to his agent relation sale of goods on credi + Del Credere Commission Payable for guaranteed de! dit * Company -,An artific lec by law exists only in contemplation of law, Distinct personality’trom its member 2 Contingent Asset - An asset the existence, ownship or value of which may be unlsovn oF ip_fucure events, Sairmined onlv-on the occurence oF Ron-occurgnce-ofone of more uncert + Contingent Lisbilities - An obligation relating to an existing condition or situation which may dies in fut ee gurance of non occurance of one oF more ncerlaia Tuture events, “Zona Recount ; One or two or more account whicinpartially or wholly off'aet another or other, TT cost of Goode sold : The cost of Gands sold during gn accounting period, in manusficturin ote Heincludes ater Birect Labour ier Direct Expenses pata Mate atactad Sim tock HeCDTFect Expenses_ a « Cototontens HOT pois oad * slg @ aininISTaTNS oS ator epote sod selling Cama op Convertible debenture : A debenture which gives the holder a right to its conversi Gertyr into share in accordaarce wilh the erin OT ISSUE. its conversion, wholl.0f, 0 me O=:83 = cr assets that are expected to be converted into mn“of goods or rendering of services in the normal course of business. Current Liability iability including short term loans, and bank overdraft, which falls * Debenture Redemption Reverse 2 Fi A reverse created for the redemption of the debentures at a fete A rere extoled fev ceclemphon, oof-fle cleberlucg ek ela) ne ie Gel oe weal * Deferred Revenue Expenditure : Expenfiture forth eon made ora labil SEP an The presumption + Defersed Revenue : Revenuc or income received recorded before it is eared and ‘caried forward to a subseqient pers or periods te which fs Teates, + Defi: Debt Balance inthe profit and oss statement Dei totence in PEL UIC - Depreciation o “c eoeceleas mark cs. ate et *pFédetermined and depletion of wasting assets. + Develépment Allowance Reserve : A reserve created in compliance with one of the conditions * for claiming development allowanecnanier income SS EE cect * Discount 1A reduction tom a list price, quoted price oF Invoices price, It also refers to the price | for obtaining payment on a Bill before its maturity, 4 Dividend ; A distribution to shareholders out of profit or reserve available Equity Shares : A share.which is not a Preference share, Also sometimes called ordinary. Snatim « wie Shon ore Qe. Catted—Oreslinory—-Chorkrenmey Final Books of Entry : Ledger. classified as () Debtors ledger or sales ledecs (i) Creditors __ledger or purchase ledger (i) General Lede, ee Cash Book » ‘ple col forms the functions of th a Ledger 90 calle Ks of original ent “Beorhy crigiral Cnbvy C- Cooks ¢ Hird ent-« 3 Petty Cash Book : Ordinary system, Imprest system. “ Ordinary System : petty cashier is given lumpsum amount. Se 1" epee * Fixed Asset * Fixed Deposit : For a specific * Forfeited share : A shi title is ‘Articles provides. * Going Concern concept viewed as containing in ojeration 101 enterprise has Hel Tsar rally the ‘scale of is operations. of an enterprise, yeriog) and at rany engagment between membels on in accounting assumption according the necesity of liquidation a Je asset arising from business connection OF * Goodwill : An intangib! i en tp petty cashier records ott Payments for sman, expenses. : so ty has no real valu Fictitious Asset : Item grouped under assets Jn. palance sheet whic! . tee. thedebit balance of profit'and Loss A/c, =A snggoods or services and. that Fixed Asset : Asset held for the purpose of roving og peoauelngsonds oF SESS Ahi, is not hold {dF resale in the normal course of Business f specified rate of Int, Tor non-payment of call mong by a member, General Reserve : A revenue reserve which is not earned for.8.5 ecific purpose, to which an entexptise is Feassumed that the, trade name of reputation and services rendered during lover the eTore ta inancial exps. when the result ol Sting Diseobulion Exps. € ~~ ve ig known as Gross Loss qe computation 1s negat Inconie & Expenditure Statment : A financial statement, often prepared. making enterprises like, clubs, association 6c. accounting period f to show.the-excess.of revenues OVGE 6X1 TLis similar to profit & loss statement & also_calied + Intangible Asset : Asset which-does nothave-a.physical identity e.g. Goodwi copyright etepHeaeoe] Jaternal Audit ; An independent appraisal activity within an enterprise where by thg staff of theentexpeise ox by im of accountants appointed for that purpose, Tor the revicw Of — ‘ thesnicreranial & other operations and contiols.as a basis Torsenvice to mahaginent. Taternal Check’ A system of allocation of responsibility, division of work & methods of recording ae a erates carlavecas Gane ren Syees Ty Saeco See ae niemeoones, “eontinously by correlay ise» established by eee a eee uisiness ot the enlerprise in an orderly and themanauient 1p ehre alhcronce To managment Policies sarequand the Aes on aumett oles eatquanl the qaocts Beet aS For as possible Mie BECIRG SN Som oie cords ible ye accuracy ant eompletmnce ot heeconds | Patents, 7 Javeatment + Expenditure on assets held to car interest income, proft or other benef Keaed Share Capital: Zhst portion of the Authorised. , cr for subscription. This includes Donus shares alloted by the corporate enterprise. 12 + Journal Proper : Records those transactions which are not recorded in any of the other nal; “Records those tananctions which are not recorded.in ansobthe.other Journals, * Mability ; The financial obligation of an enterprise other than owners funds. heupenansideemmenn tenance * Long term Lisbility : Liability which docs not fall due for payment in a relatively short period i.e normally a period not more than twelve months, An accounting concept according to which all relatjvely important and relevent, tee Che RUST OTC MBE MTEC THC Toa user OL ser of the, * Net Assets : The excess of the book value of assets (other than fictitious assets) of an enterprise. over its liabilities: This is also referred to as networth or shareholders funds. a SS ee ae ° Ne * Net Fixed Assets : Fixed Asstes less accumulated «leprectation there on upto date. Net Profi he excess of revenue over expenses during particular accounting period, W! Tesult of thiS computation is negative known as Netbese= Operating Profit enterprise with Tmancial nature, oo * Paid up Share Capital : That part of the subscribed share capital for which consideration in cash or otherwise has been Feceived. This includes bonus share alowed by Ihe corparate= the share capital of the companies w! he net profit, rom the norm: activi into account of exiransous (ransactions and-expenses of a purely_ + Preference Share Capital hich enjoys. preferential ri mapital. PreTerenice * Propriety Concept : A concey or specific transactions of an. En Br oe ee eer es, or juding those based on considerations of public interest. = Prudence : A concept oi di fing according to which (in view of tuncertalnifyrattaches- forums rest On a a ie ot igh not necessarily in cash, under this concept, provision is made for all known MHES a Woases" Sven Wough Ue GAGUAT Cannot be SMCTAIEE WING ARES ‘Stepresents only a best estimate {ire Wght of avallableainformation, * Profit & Loss A/e : A financial statement, presents the revenues and expenses the excess of Boeri oes Sipenanne & vice vena vice versa + Revenue : The gross inflow of cash, receiavables of other. ation arising in.the c f iy activities of an_enterprise irom the sale of goods, {cam the rendering of services & - Tro Sof eh enerprise resourses yielding interest royalites and dWvid iends, €etl period or due notice) under certain cireumtances 7) Aenean lt ley Cogital_operteve. + Re¥enue Reserve : Any reserve other than a Capital Ri of Right Share : An allotment of sha Receipts & Payments A/e : Summary of cash transactions i.¢, cash books statis with ania, cash in band ona dane ate oc i sig ca on ORS LS Sf eevenue nate Non prolit sccking concerns, Records both receipts & Payment oles ited as paid on_the shares and or stocy, Aggregate amount of money paid or te Rte DR ‘The excess of the face value of the shares over their issue price. the net assets. of corporate * Surplus : Credit balance in P/L A widing for proposed appreciation e.g. Dividend. * Sales Return Book : Records Return of goods by the customers sold only on credit, * Trade Discount ; A reduction granted by supplier from the list price of services on business considerations other than Tor amaLaumane cates | eBusiness considerations other mane. + Trial Balance ; List of debit & credit Balances, 3 methods of construction (i) with balances (i) with totals (ji) with balances and totals - Trial Bal: cates (i), Errors of Posting Lil) _Clerical errors (il) Errors of commission, Prepared for checking the | ‘of bool = @rithmatical accuracy * Unclaimed Dividend : Dividend which has been declared by a company and a warrant’ | hhas been despatched but has not been ied by the share holder concemed, Shown under ‘current liabilities and provisions. Daaie + Wasting Asset : Natural res ich is subject to depletion through the pi extraction or use%e,8- Mines, Quaries. rough the process of Con = : * Working Capital : Fund available for conducting day to day operation i Tepresented by.th rent Assets over Cuitent Liabilities inchudiee ey aon a : = vate Company inin ———*_ i ae_ * percon to fom CS) ee TT. ea 6) 2) Maximum 3) Minimum Directors 4) Quorum iMémber personality Presérit) -do- : ee ee panes _ ~ 5) Board Meetings 4 Meetings” u— ame (amet) ~) = each year i.e, one for we SO é 6) Registration ‘impulsory under Cz =) ' Com. Act 1956 oer ce —o aol Not Compulsor Tine d If not Table A 5 tee ae, Eyeuistie a ya directo 9) Statuory Meeting Goan! InGiee ‘Accounting For Fixed Assets. _~ The Bifect of Changes In Foreign Exchange Rates. | caminting TOF Gorsnment Granta eT [AS=13—| Recaumting For investments 45-14 | Aceounting For arialgamalon 7 }AS- 15 | Employee Benefits. ~ [as~ie— [Borrowing Cost o> [as=17 | Seament Reporting > 5-1 | Related Pargy Disdoaurea = AE-15[ aseounting For eases. bas-30~| Baring Per Share > AS-21 | Consolidated Financial Statement. 7 ‘AS- 22 [Accounting For Taxes on Income. — ‘AS- 23 | Accounting for investment in associates in Consolidated Financial, — Statement. Discontinuing Operation. a | Tnterim Financial Reporting. > 1 Intangible assets. + ms Financial Reporting on Interest in joint Ventures. >> Impairment of assets. a a Provisions, Contingent, labilities and Contingent assets, > Financial instrument : Recognition , Measurements Financial Instrument: presentation, = ee — Financial instruments, Disclosures and Limited revision to accountng 7 standards. [Section - 11 FINANCIAL STATEMENTS ANALYSIS aning of Analysis of Financial State-ment: Analyzing finan: process of evaluating relationship between compo to obtain a better understanding of firm’s posi Significance and purposes of Fis inl State t Analysis : “47” To judge the present_and future carning capacity.and profitability ofthe. -DiSiness " Mill” “To have comparative study.of the past periods in regard_to one firm with the firms inthe same industry. —— “étl]_ To judge the operational efficiency of the business\—— Mivl” Tomeasunt thelong-texm, shor es of Financial Statement Analysi Sieeeral Analysis MT ternal Analysis ‘wif Long-term Anal wis Short-term Analy: (" Horzontal(or DynamicyAnalysi¢\ Dynamt Static LZ: ‘Techniques of Financial Statcment Analysis: @ Comparative Financial Statetients: These statement are sa-designed as to provide time a classification of Ratios : Ratios q 2 : Perspective to the various elements.of finan position contained therein. 4) Common Size Statement: These financial statement are those in which reported are converted into percenmanes to some common iif Trend Ratios : It can be defined as index number num! x ts of the various fimancial items in the financial statement for a number of periods. \lirf Cash Flow Statement : This statement is prepared to know cl items of inflow al Ww lef Fond Flow staterusnt.; Ib jp that statemeht which | psatin 1a atacidge: fie Zource and application of funds and i i ERSGe OF Te Teas DOWER lane Set ot are the linen (vi) Ratio Anaiysis : Seighl nat ane individual i argraup of items usually shown i eriodical financial “Gintements pubtsted oy the concen. Tes cieamare or uses are as follows © "7 “it an toaeia in see A 47 Goefut ink assessing the operational ange “Useful in assessing the operasont iff Useful in forecasting purposes: ivy Tsetul in locating the weal ; Gs Types Formula PROFITABILITY RATIOS WAY Gross Profit Ratle cross Profit 100 ross Profit= Sales - Cost of Goods Sold et ahommmname ERENT 109 ne ro nate : eae, 100 eet ea Ta ~s ‘wy tv) @) en Types Formula Cost of Good Sold-+Operating Expenses af ig Repent 5 100 Net Sales ci008 —_ Operating Ratio () Cost of Goods Sold = Opening Stock + Purchases + closing stock Direct Expenses + Manufacturing Expenses Orsales ~ Gross Profit. (il) Operating Expenses = Administrative Expenses + Selling ‘gnd Distribution Expenses + Depreciation + Solares + Mis. Expenses Operating Profit Operating Profit Ratio era ee Net Sales 200, Operating Profit = Net Profit + Non-Operating Expenses — Net -Operating Income. Operating Profit Return on Capital Sperating Profle y 109 a . Capital Employed Employed Capital Employed = Equity and Preference Share Capitol + ee Spy = Sey one Preference Shore ee Undistributed Profit + Reserves and Surplus + Long-Term Liabilities — Fictitious Assets ~ Non-Business Assets, “0 (i) (iii) Net profit after Tax and Preference Dividend ea A x100_— Market Price Per Share ice Earning Ratio o_Netsaes 10 a lend Per Share x10 Market Price Per Share Earning Per Share Dividend Yield Ratio 0 ! z 3 3 2 5 i 2 a g g : g Z 3 z & 5 8 Interest Coverage Ratio. 0 Cost of Goods Sold Inventory (Stock) Turnover Ratio a coay X10 ‘nverage inventory at ost . 14 kits enim aT Types Formula Net GreditSales oe GAY Debtors Tuover Ratlo ‘Average Debtors ‘average Debtors * «)-+Closing (Debtors+ i/x) | opening (Debtors+ Bills Receivable 2 i credit ver Rat (ii) Creditors Turnover Ratio Fverage Creditors Average Creditors opening (Debtors + Bills receivables) +Closing (Debtors +2/k paring Oevonsem Renae a Z {iv) Working Capital coGs/sales Rising ate Networking Capital ; eee Net Working Capital = Current assets Current Liabilities ‘coGs —» Cost of Good S Id, Lest TERNTALATION & 3 Joo wouonvsano ge a <4 7 Current Assets ce | cormvetinccntay Faas a rate, re Liquid Assets eee Gi) Liquid (Acta Test or Quick -_Liguia assets _ ty = tase geen ae) Curent Liabilities Ratio Liquid Assets = Current assets — isan io 2 Expenses — (2) STABILITY RATIOS 4 muse () Debt Equity Ratio Saran re Hs shoreholder’s Fund = Preference and Equity Share Capt! Wi Profit & Loss A/c (Cr-Balance) + Capital Reserves * Shareholder’s Fund (i) Proprietary Ratio iota Tangible Aisecst Total Tangible Assets “Imitagion of Financial Statement Analysis Fstorical nature of financi o substitute for urd Jesely Reliability of £ SI sofitegult may have diferent “WoFbrice level anges reduce thevaldiv of the analyse, 26 j - Tile rein 4 Agdag _ avila A Gear —> SiGe ‘Type of Speculators wee Ye is a speculator, (Tejiwata i sary Be! ear {also known, sy ma fc of the security. jmumediately, He salto Stee A sta is @_speculator who ay it difficult_to_mee! \WiifGrowth Stock : Stock of a i oT for fut “iijeilt Eaged : SecUFities issued by | cnt iv) Kerb Dealing ealings in securities between members outside the official ading hours, pitts SI SSENOMO cd Patt ache ah ivy Paper profit: Unrealised profit on a share—— ose yt et Shaye : Mutual func ial in “saving of small investors and invest these in vari ities Jil de Dentures "and_other_ ins! Mutual Funds in Tadia : Mutual fun India {UT was estab! jovernm "The main obiective RASS i was ta mobilise the ea _ ‘and channelise them Tinto productive investment. yitmedin(@O Meaning 6f Jobbers and Brokers : A jobber is a dealer in securit sells and purchases securities in_his own_naine with 4 view to earn profit duc to.pri ‘Tuctutions-Hesis-e-specmaisea speculator, ESO on the Stree NTS-@- COMTSSIOn agent who. transacts business in ‘Sécuritities on behelf of outsides who are not thumembers of stock exchange. UTI is established fn 194 ae Gabe Se checlie. tin io, sti ido unos f uses dorkiog, FOREIGN TRADE Meaning of Forelgn .2eross_political_fronticr “country are sold ina forcien country, itis Jey “av couniis- bus. goods ar-seruices from a foreign couple count of many reasons eed of Fore; Se : Foreign Trade takes place on account of many FeASens, cheno C-Fiaman wants and countiy's resounves do not totally nds 10 be interdependence on aJare-scale, fjFactor endowments in different countries differ. Seep ainties “iifTechnoloxicnl advancement of different countries. differ. Thus. s ure better paled in one kind of production, ; sri, Paid eaeprencurat Sui afer tr-diferent_coun ore apne it bile between counties. coincide. Hence, there go re of various nature such as: s from foreign Trade : Gains from trade are o! such as. Foreign Trade involves territorial division of labour and regional speclalistion ii-pmdiction. This leads to mcreased ductivi iff This trade leads to optional_unlisation_of (iJ country can_get_goods whi annot ing count uu “produce due_to lack of. dechnicalknow-how-and lier reasons. ae 3 a effi the coun ~{ivjit_ promotes competition, economic alertness and_effeiency in i <{vLTChakes It possible to have consumption of more vericties_and improvement in ‘world’s wellare at large. Terms of Trade : The term “terms of trade” expresses the relationship between ihe export and import 7 rt, term of trade, n the total exports, term of trade is unfavourable to the country. Rate of Exchange : The rate at which the currencies of bw ions ane exchanged for each other is called the rate of exchange, For example, if iUS $ is \/Exchnge for Rs 68 then foreign exchange rate is 1 US $= Rs 68. “Exchnge for Rs 68 # ign 8 Mint Parity Theory : The theory explaining the determination of exchange ra! between countries whi aie on ie same metatic standard Iav—gold cain = \ Bland ig kngwa as the slat parity theory of Towelgn exchange known as the mint parity theory of foreign exchange rate, Balance of Trade : It refers to the merchandise account of exports and impor (ouly=It simply refers to the dilerence between. Ine of exports “and visible a a a mncsccistCa!

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