Money Banking & Finance
Functions of Money.
Following are the main function of money
1. Medium of Exchange:
Money serues as a medium of exchange
It passes from one hand to another hand , For example, Mr. A wants to buy a pen . He goes to a shop and gives five rupees to the shopkeeper. The shopkeeper gives him pen against five rupees. For purchase and sales of pen between Mr. A and shopkeeper Rs. 5 are used as a medium of exchange.
2. Standard of Value:
Money is a standard of value with the help of money we can measure the value of different good when we say that 1kg rice price is Rs 20, It means that value of 1kg rice is Rs 20 . So money helps as to know the value of commodities.
3. Common means of payment:
Money serves as a common means of payment because people do not feels hesitation to accept it
4. Standard of future payments:
It is the main function of money that it is used as a standard of value in future payments for example a person advance gives a loan to another person for rupees 1000, for specific future date on due date debtor to pay Rs 100 along with interest. In barter system people feel hesitant in credit transaction.
5. Transfer of values :
Now a days we can transfer the value of goods from one place to another place with the help of money, suppose a person has a house in Lahore, he sells his house and purchases a new house in Multan. It means that he converts the value of house of Lahore into the value of house of Multan.
6. Store of value:
Store of value means the value of different goods can we store in the form of money perishable goods like vegetable ,fruits , etc, cannot we stored for a long period. So we can store the value of these goods in the form of coins and paper money .
7. Unit of Account :
Money is also used as a unit of account in the transaction of goods and services .
8. Government payments :
Money is used for the GOVT payments and revenues the amount of taxes, electricity bills
sui gais bill fines etc are collected by the GOVT on the shape of money
9. Maintenance of Accounts:
It was very difficult to maintain the accounts under barter system in the form of commodity Now the accounts can be maintained very easily in the form of money.
10. Determination of Solvency :
With the help of money it is very easy to determine the financial position of an individual firm or any company.
11. Most Liquid Asset:
Money is used as most liquid asset. Because we can convert it in the form of goods and services very easily. For example a person has gold only he wants to purchase Furniture. In this case firstly he has to convert the gold into money then he will go to purchase a Furniture.
12. Base for credit instruments:
Money is a base for credit instruments ( cheque, draft , Bills of exchange. Etc ) . Now at present age % the businessman are using the credit instruments for the transaction of goods and services, this all because of money.
13. Measurement of National Income :
Under the barter system it is very difficult to measure the national income in the shop of commodities . But money makes it very easy to calculate the national income of the nation.
LETTERS
Inquiry letter
Reply letter
Order letter
Credit letter
Sale letter
Collection letter
Complaint letter
Adjustment letter
Jop letter / Sales letter / Job Application
1. Qualities of a good business letter
OR
2. Qualities of effective business message
OR
3. Qualities of effective business letter
OR
4. Qualities of good business correspondence
OR
5. How can we writer down an effective good business letter
OR
6. Essential of a good business / Communication Corresponding
OR
7. Principles of business communication / letter
OR
8. Write down 7.C’s of business letter
Ans:
A good business letter generally has these qualities.
1. Clarity
2. Courtesy
3. Clearness
4. Correctness
5. Continuity
6. Cohesiveness
7. Conciseness
8. A good start
9. Brief
10. Attractive
11. Simple language
12. Love and affection
13. Effective
14. Creates a favorable Impression
1. Clarity: ( )
Clarity means clearness in writing. It is very good quality. When we are speaking to some one . It is easy to explain and clarify a point. In a letter , this facility is art available the writer , there fore , should think deeply over what he wants to say. Then writer the main points of his subject writer and then finely make a rough draft of the letter this rough draft should be revised and improved .All this will take some time of writer but it will make his.
2. Courtesy ( )
A good business letter must always be the written politely . A businessman has some times to writer letter dealing with unpleasant matters , like making a serious complaint or claiming damages ( ) Such letter must be written very tactfully because polite bundling of such matter will prove very beneficial to the writer Moreover , in business there is no place for I am man who is rude ( ) and impolite to other.
3. Clearness ( )
Clearness in writing is a very good quality of the business Letter. The writer should think the main points of the subject mater and then finely prepare the rough draft. It should also be revised and at least once and it must not be sent out with out given a second look.
4. Correctness ( )
A letter which is full of mistakes all types cannot fulfill its purpose well because all errors can do some harm ( ) . Show a letter should be correct in form as will as language . The information given in the body of the letter must also be correct. An easy way of achieving this purpose is that a letter should be revised at least once and it must not be sent out with out giving ( )a second look.
5. Continuity ( )
All the sentences used in the letter should coordinate to each other . If there is no continuity . A reader is unable to understand the meaning of the letter.
6. Cohesiveness: ( )
A letter must be coherent. It should hold together. It means that each port must be related to the other parts of the letter. Each sentences should flow in to the next and each paragraph should be connected to the other.
7. Conciseness: ( )
Business men who are very busy can not find time to read long letter and reports and digest their contents, consignees ( ) is there fore a very desirable quality but it is very difficult to say how long a letter should be.
A man once asked “Abraham Lincoln” “How long a men’s legs should be?” he replied “Just long enough to reach the ground” A good letter should be just long enough to serve its purpose.
8. A good start: ( )
A business letter should have a good start, development and should be divided in to paragraph. An interesting start can impress the reader. The first sentence of the letter should be simple . A statement or a request.
9. Brief : ( )
The writer should avoid writing unnecessary details. A good business letter is always brief and complete in all respects. The writer should write only what he wants to say. It should save the time of the reader.
10. Attractive : ( )
The appearance of the business letter should be attractive. It must look pleasant to the eyes superior quality of paper and neatness of typing creates a good impression.
11. Simple language: ( )
A good business letter contain a simple language. If the sentences
Language and words simple, than cowman man will easily follow the meaning of the letter . Try to make smalls sentence and use simple words.
12. Love and affection: ( )
A good business letter should be written sin such a away in show in love and sincerity for the reader
13. Effective: ( )
Effective communication is the life bled of every organization and key to success in business life.
According to “Lord Chester field” style is a dress of thought and a well dressed thought like well dressed man appears a great advantage.
14. Creates a favorable Impression:( )
The first impression of the reader is formed ( ) by the appearance of the letter be received . If the letter create a great impression , he will react more fare ably, otherwise he may form a poor opinion about the write . There fore, every letter that is sent out must look pleasant create a favorable impression or neatness of typing or writing, good quality of stationery and superior quality of paper.
Correspondence
Letters Communication
Message
Q. (1) ESSENTIAL PARTS OF BUSINESS LETTER
(1) Essential parts of a Business letter .
(2) Mechanical parts of Business letter .
(3) The Lay-out of a Business letter .
(4) The specimen of a business letter .
Answer: The following are the essential of a business letter.
(1) : The heading.
(2) : The date.
(3) : The inside address.
(4) : The salutation.
(5) : The body
(6) : The complimentary.
(7) : The signatures.
The Heading:
The heading consists of the name of the firm and its full address. Most business companies use printed letterheads on which the essential of the address are given. Many letterheads contain additional information such as telephone number, cable code, telegram address, reference line, even names of senior officers and addresses of its branch offices.
When a plain paper is used, the heading should be typed or written to the right of the centre of the page.
It should not begin form the left the centre even if there is long line in the address. The heading should be type about two inches below the top of the paper for letters of medium length.
The Date:
The date is usually typed after two spaces below the last line of the heading. The date should be written in full as:
September 21 , 1977
The ,month or the year should not be abbreviated. Needless additions of st , nd, rd, th ( 1st, 2nd, 3rd, 4th, ) should be avoided.
The Inside Address:
The inside address consists of the name and address of the person, organization, company, or department whom the letter is sent. It is called inside address because the same address is written outside the envelop. These address must be in the same form. The inside address performs three functions:
(1) . It is an identification for delivery by the received
(2) . It provides a record for the sender.
(3) . It provides an additional address for delivery to the address if the envelop is somehow separated form the letter.
Three to four lines in the inside address are normally used. The first line of the inside address must always begin at the left margin.
The names in the inside address should always be preceded by a title, such as Mr. , Messrs, Mrs. , Dr. , or Honorable. The article ‘the’ should be used before the name of company.
The Salutation.
The salutation always starts at the left margin and is followed by a comma or a colon . It is an expression of courtesy . It is typed two spaces below the inside address and evenly with the left margin. The standard forms, according to the degree of formality, are these:
For men For women
Most Formal: Sir Madam
Formal: My dear Sir My dear Madam
Less Formal: Dear Sir Dear Madam
My dear Dr. Khan My dear Mrs. Khan
Dear Mr. Haleem Dear Miss Naseem
Friendly : My dear Haleem Dear Naseem
Dear Naeem
The Body:
The body of the letter contains the message. It should begin two space below the salutation. If the subject line is also written, then it should be written two spaces below the salutation. Single spaces make the appearance of the letter look very impressive. In short letters, however, double spaces are used to make for shortness of the body. When the letter is written in semi-block form, the first line of each paragraph is indented five or seven spaces. In block-form or full-block form is used, the first line of each paragraph and every subsequent line begins even with the left-hand margin.
The complimentary close:
The complimentary close is a kind of good-by line. It is directly related to the salutation the same degree of formality should be used in it as is used in the salutation.
The different forms used, according to the required degree of formality are as follows:
Yours respectfully
Respectfully yours with ‘Sir’ or ‘Madam’
Yours obediently
Obediently yours
Yours truly
Yours faithfully with ‘Dear Sir’ or
Yours very truly ‘Dear Madam’
Yours very faithfully
Yours sincerely Dear Mr.….…..or
Yours very sincerely with ‘My dear Mr.…or
Yours cordially ‘Dear………….’
The complimentary close is used at least two spaces below the last line. It may begin at the centre of the page and, if the signature line a long one, it may even begin form left of the center.
There is a tendency towards the use of complimentary close in terms such as:
Gratefully yours Earnestly yours
Expectantly yours Regretfully yours
Sincerely yours Cooperative yours
The Signature:
The position of the signature is two spaces below, if the signer’s name is to be typed below the signature. The letter should always be signed in ink.
In big companies, it is not possible for the head of the business to sign every out-going letter. In this kind of authority does not exist in one form as the other, the signature should be in this way:
For Haleem & Co.
Amjad Naeem.
If the proper authority exists, it should be indicated thus:
Per pro Haleem & Co.
Amjad Naeem
Q: (2) NON ESSENTIAL PARTS OF A BUSINESS LETTER
(1) : Non Essential parts of a business letter
(2) : The optional parts of a business letter
Non-Essential Parts of a letter
Answer:
The following are the non-essential parts of a business letter:
(1) : Reference line
(2) : Attention line
(3) : Subject line
(4) : Identification line
(5) : Enclosure
(6) : Carbon copies
Reference Line:
It denotes the reference number of letters. It takes a variety of forms, but whatever form it may take, the purpose is the same, i.e. to enable the replies to linked with previous correspondence and to find their way quickly to the right branch, department and official. Failure to quote references when necessary can cause inconvenience to the recipient.
The reference line is placed in the upper left-hand corner in line with the date to give it a balanced effect. Often the reference line are pointed just below the letterhead towards the left-hand margin, as:
Salim Bros & Company
Construction Engineers
214 The Mall, Lahore
Our reference: September21, 1977
Your reference:
In modern letters, however, the tendency is to weave the addresses reference number in the opening line of the letter, as:
Thanks you for your letter No. 123 of September 21.
The writer of a business letter should learn the method used by his firm because every business house every business house adopts its own method of quoting reference.
Attention Line:
This line is written below the inside address only when this address is an impersonal one, i.e. it contains neither a name, nor an office position. If, for example, the inside address is : Modern Crockery Manufactures, 201 Dhani Ram Road, Lahore, the attention line will appear like this:
Modern Crockery Manufacturers,
201 Dhani Ram Road,
Lahore.
Attention: Mr. A.B.A. Haleem
If, however, the address was: The personnel Manager, Modern Crockery Store, Lahore, then no attention line would be needed as the letter is already addressed to a particular person and is likely to reach him quickly.
Subject Line:
The subject line is placed in the centre between the salutation and the first paragraph of the letter but in a full book letter, it begins, like every other part, with the left hand margin. It states the subject, i.e. the central idea of the letter an enables the reader to understand at a glance what the letter is about. When the subject of the letter is mentioned in the opening lines, the subject should be stated in long messages only. In a short letter it is unnecessary.
Identification Line:
This line is used on business letters only and not in personal correspondence. The initials show who dictated the letter and who typed it. The director’s initials come first on the left side and the typist’s initials are placed on the right. They are typed on the same line as the last line of the signature-block or two spaces below:
Very sincerely your,
Modern Crockery Manufactures
Jamilur Rehman
Office Manager
JR: am
The identification line ‘JR : am’ means that the letter was dictated by Jamilur Rehman and the dictation was taken by Ameen Malik.
Enclosure:
If a letter contains an enclosure (a copy of another letter, or a document , or a change etc.) it is always indicated by writing the word ‘enclosure’ one or two spaces below the identification line. If there is more than one enclosure, the number of enclosures should be indicated as Encl. 3. The usual forms of writing this line are:
Enclosures
Encl.
Encl.3 Certificates
Carbon Copies :
If carbon copies are being sent to other persons, this should be indicated immediately below the identification line, as:
cc to Mr. M. Ajmal
cc B.A. Haleem
Sometime the writer wants to send a carbon copy to a third person without letting the original addressee know this. This copy is called a blind carbon copy because the person to whom the letter was originally addressed is unaware of the situation. However, to keep a record of the blind carbon copy, the stenographer types this on the office copy of the letter, as:
CREDIT CREATION BY BANKS
The commercial banks are manufacturers of credit. The commercial banks provide loans . The amount is not paid directly to customers. The bank opens an account in the name of borrower. The account is credited with amount of loan. The customer can withdraw amount by mean of cheques. Thus banks create credit or loans create deposits.
PROCESS OF CREDIT CREATION
Suppose bank receives Rs5000 as fresh deposit from a customer. The bank keeps some cash to honour cheques of customers. The amount so kept is known as cash reserve. Suppose cash reserve ratio is 20 percent . The bank can lend 80 percent of deposit to needy people. The position of first category bank after credit creation is as follows.
Balance Sheet of Bank A
Liabilities Rs. Assets Rs.
Deposits 5000 Cash 1000
Loan 4000
5000 5000
Customer may deposit the loan of Rs.4000. The receiving bank can lend 80 percent of it after keeping 20%percent as cash reserve. It can be stated in balance sheet of second category bank.
Balance Sheet of Bank B
Liabilities Rs. Assets Rs.
Deposits 4000 Cash 800
Loan 3200
4000 4000
Customer can use the loan of Rs.3200. The receiver can deposit this amount with this or another bank. The receiving bank can lend 80 percent of it after keeping cash reserve of 20% percent. The balance sheet of third category bank can be stated as under.
Balance Sheet of Bank C
Liabilities Rs. Assets Rs.
Deposits 3200 Cash 512
Loan 2048
3200 2560
The amount of Rs.2560 advanced by this bank can be used for making payments. A person receiving money from customer may deposit amount with this bank or other bank. The collecting banker can advance 80%percent of deposit and keeps 20% percent as cash reserve. The balance sheet of fourth category bank can be stated as follows :
Balance Sheet of Bank D
Liabilities Rs. Assets Rs.
Deposits 2560 Cash 512
Loan 2048
2560 2560
The process is not yet complete. It will continue further. The whole process can be stated in a summary as under:
Multiple Credit Creation by Banks
Bank Deposits Cash Reserve Loans
A Rs. 5000 Rs. 1000 Rs. 4000
B 4000 800 3200
C 3200 640 2560
D 2560 512 2048
25000 5000 20000
A fresh deposit of Rs.5000 is used to create credit of Rs.25000 when cash reserve ratio is 20 percent. If the reserve ratio is 10 percent then created credit is Rs. 50000. A low reserve ratio increase credit creation powers of the commercial banks. An increase in reserve ratio decreases power of banks to create credit. The amount can be calculated by means of formula.
CREDIT CREATION = Deposit ×100
Cash Reserve percentage Deposit× 1/CRR
= 5000×100/20 = Rs. 25000
ASSUMPTIONS OF CREDIT CREATION
1. MANY BANKS: There are many commercial banks working in the country
2. SAME CASH RESERVE: The cash reserve ratio, must be same for all banks . Law that all banks must keep a percentage of their deposits in cash can fix the ratio.
3. NO LEAKAGE: The amount taken, as loan from one bank must be deposited into same or second bank. The loan given by second bank must be paid into third bank and so on.
4. INITIAL DEPOSIT: There should be primary (initial ) deposit into every bank from customers.
5. MANY BORROWERS: There are many borrowers in the country.
6. TECOVERY ON DUE DATE: It is assumed that credit recovery is made in time.
LIMITATIONS ON CREDIT CREATION
CENTRAL BANK : Bank rate can be increased or decreased by central bank for effective monetary policy.
CASH RESERVE: The higher ratio of cash reserve, the smaller the volume of credit creation.
PRIMARY DEPOSITS: The deposit from account holders is the basis of lending . The power of commercial banks is limited to fresh deposits.
GOOD SECURITIES: The commercial banks provide loans and advances against good securities.
BUSINESS CONDITIONS: The better business conditions inspire people to borrow money for their business.
WILLINGNESS OF BORROWERS: The Commercial banks cannot create credit unless there is demand for loan from customers.
ALL BANKS: It is necessary that all banks must lend their surplus fund, through uniform policy
MONEY SUPPLY: There should not be any change in money supply.
Money, Banking and Finance
1. What is Banking System? What are different kinds of bank?
2. What is commercial Bank? What are the functions of Commercial bank?
3. What is Commercial Bank? What is importance of Commercial bank?
4. What is Commercial Bank? What is Role of Commercial bank?
5. What is Central bank ? What are Functions of Central Bank?
6. What is Central Bank? What is importance of Central Bank?
7. What is Central bank? What is Role of Central bank?
8. What is distinction between Central bank and Commercial bank or How a Central bank is different fro, Commercial Bank.
9. Define Monetary Policy? Discuss in detail the objectives of Monetary policy?
10. What are the Rights and Duties of banker and Customer?
11. What is relationship between banker and Customer? Also explain the types of relationship, Also discuss that how this relationship is terminated.
12. Discuss the privatization of bank and in Pakistan and also explain its advantages and disadvantages.
13. Discuss the Nationalization of Bank in 1974 or what are the causes of Nationalization of bank in Pakistan ?
14. How Commercial bank Creates Credit? And What are their Limitations?
15. Discuss the situations under which a Banker can refuse to honor the Cheque of Customer?
16. What is Letter of Credit? How it is opened and what are different types of letter of credit?
17. Explain the term "Money" and discuss in detail the Evolution of Money?
18. Discuss the barter system and what are the difficulties of Barter System?
19. Define Money ? Also explain different types of Money?
20. Define paper Money ? What it's Merits and Demerits?
21. What is Inflation? What are its causes? Also explain it' Remedies?
22. What are the principles and Methods of Note Issue?
23. Define Quantity Theory of Money?
24. Define Modern Theory of Money?
25. What is Trade Cycle? What are different phases of Trade Cycle and also explain the measures to control Trade Cycle.
26. What is Foreign Exchange? What are the factors that Foreign Exchange Rate?
27. What is Index Number? What are its uses and Limitations?
28. Discuss in detail the Islamic Modes of Financing?
29. What is Business Finance ? And What are the advantages and disadvantages of Debt Finance?
30. What is Equity Finance or Owner Equity ? Also explain its advantages and disadvantages?
31. Negotiable Instrument ( Cheque, Bill of Exchange and promissory Note)
SHAHID RIAZ
0333-8398899
Single entry
1. Problems:
Statement of Opening Capital
Assets Liabilities
Cash in hand
Stock
Debtor.
Machinery 3,000
20,000
30,000
50,000 Creditors
Opening capital 23,000
80000
103000 103000
Statement of Closing Capital
Assets Liabilities
Cash
Stoke
Debtor
machinery 4000
25000
45000
45000 Creditors
Closing capital 25000
94000
119000 119000
Statement of Profit and Loss
Closing capital 94000
Drawing 3600
97600
-Opening capital 80000
-further Capital 10000
7600 Ans
2. Problem
Statement of Profit and Loss
Closing Capital 48,000
Drawing (600×12) +1500 8700
-Opening capital 50000
Profit Rs. 6700 Ans
3. Problem
Statement of Closing Capital
Assets Liabilities
Cash
Cash bank
Debtors
Stock
Bill receivable
Furniture 3000
Depreciated 10% (300) 450
2500
4050
7000
1800
2700 Borrowed
Creditors
Closing capital 5000
750
12750
18500 18500
Statement of Profit and Loss
Closing Capital 12750
Drawing 3000
-opening capital 20,000
-Further capital 2000
Net Loss 6250 Ans
4. Problem
Statement of Closing Capital
Assets Liabilities
Cash
Bank
Debtors
Stock
Bills Receivable
Furniture 5000
Depreciation 10% 500 500
6500
12000
17000
4000
4500 Creditors
Rent owing
Borrowed 12500
Interest 9% 563
Closing capital 1250
375
13063
29812
44500 44500
Closing capital 29812
Drawing (750×12) 9000
-Opening capital 25000
-Further capital 3750
Net Profit 10062 Ans
5. Problem
Statement of Closing Capital
Assets Liabilities
Cash in hand
Cash bank
Stock
B/R
Furniture 12000
Depreciation 1200(10%)
Debtors 28800
- write off 2800 1200
15600
40800
9600
10800
26000 Creditor
Rent due
Rent 30000
Borrowed rent 2250
(30000×10/100×9/12)
Closing capital 3000
900
30000
2250
67850
104000 104000
Statement of Profit and Loss
Closing capital 67850
Drawing (1800×12) 21600
89450
-Opening capital 50000
-Further capital 19000
-Interest Further 1425
19000×10/100×9/12
-Interest capital 5000
Profit Rs. 14025 Ans
6. Problem
Statement of Closing Capital
Assets Liabilities
Cash in hand
Bank cash
Stock
Furniture 1500
Depreciation 10%( 150)
Debtors 4600 bad debts 200 and 5%(220)
Motor car 6000
Depreciation 10%(600) 500
5000
6000
1350
4180
5400 Creditors
Closing capital 6000
16430
22430 22430
Statement of Profit and Loss
Closing capital 16430
Drawing 3000
-Opening capital 12000
7430
Net profit Rs. 7430 Sheet 22430
7. Problem
Statement of Opening Capital.
Assets Liabilities
Cash
Debtors
Stock
Bills receivable
Motor van
Furniture 900
22800
33400
30500
4200
3400 Creditors
Overdraft
Opening capital 31200
40800
23200
95200 95200
Statement of Closing Capital
Assets Liabilities
Cash
Stock
Bills receivable 28800
Reserve 1600
Debtors 21400
Bad debts1000 (%5)reserve
Motor van 4200
-write off 800
Furniture 3400
Depreciation 10%340 2800
37400
27200
19380
3400
3060 Creditors
Overdraws
Closing capital 28400
39200
25640
93240 93240
Statement of Profit and Loss
Closing capital 25640
Drawing 4800
-opening capital 23200
Profit made for the years Rs. 7240 Ans
8. Problem
Statement of Closing Capital
Assets Liabilities
Land building 20000
Depreciate 2% 400
Furniture 3000
Depreciate 5% 150
Plants 55000
Depreciate 10% 5500
Stock
Debtors 75500
Reduced by 2% 1510
Cash 19600
2850
49500
9200
73990
8300 Creditors
Loan
Other liabilities
Closing capital 65000
56600
13400
28440
163440 163440
Statement of Profit and Loss
Closing capital 28440
Drawing 3000
Private purposes 800
32240
-Further capital 1000
-Opening capital 30,000
Net profit Rs 1240 Ans
9. Problem
Statement of Opening Capital.
Assets Liabilities
Furniture
Office Equipments
Motor car
Cash bank
Sundry Debtor
Prepaid Expenses
Stock in trade 46000
48000
47000
45000
80000
1400
25000 S. Creditor
Out standing
Bills payable
Opening capital 110000
2500
9000
170900
292400 292400
Statement of Closing Capital
Assets Liabilities
Furniture
Office Equipments
Motor car
Cash at bank
Prepaid or unpaid
Debtor 85000
+ sale omitted5000
90000
-N/Profit 6000
Stock 63000
47700
37600
38000
2500
84000
37500 Creditors
Outstanding
Bills payable
Closing capital 75000
5880
5000
224420
310300 310300
Statement of Profit and Loss
Closing capital 224420
+Drawing 21000
245420
-Opening capital 170900
-Fresh capital 25000
49520
+out Standing closing 5880
-out Standing opening -2500
-prepaid closing -2500
+prepaid opening 1400
Net profit 51800 Ans.
10. Problem
Statement of Closing Capital
Assets Liabilities
Cash
Cash bank
Debtors
Bills receivable
Stock
Furniture 5300
Depreciation6%318
Machinery80200
Depreciation10%8020 400
5810
56280
6840
36730
4982
72180 Creditors
Bills payable
Closing capital 21470
5950
155802
183222 183222
Statement of Profit and Loss
Closing capital 155802
Drawing (4800+4800) 9600
-opening capital 146800
Net profits Rs. 18602 Ans.
Single Entry system
1. Opening capital
2. Closing capital
3. Profit / Loss
1. statement of opening capital
Assets Liabilities
Without
Adjustment
Opening capital
2. Statement of Closing Capital
Assets Liabilities
With Adjustment
Closing capital
Statement of Profit and Loss
Closing capital
+Drawing
-opening capital
-further capital
-Interest on capital
Net profit …..
…..
…..
…..
…..
B. Statistics
Mires of central tendency
1. A.M / Mean / Average
2. Median
3. Mode
4. Geometric mean
5. Harmonic mean
1. Arithmetic mean
1. Individual items
2. Discrete series
3. Groped data
4. Step deviation method / encoding method
Individual items
D=( x-a)
x D
10 -20
20 -10
30 0
40 10
50 20
60 30
Total 210 Total
30
Direct Method : A. M = ∑x
n
= 210 / 6 = 35 ans
Indirect Method : = a+
1. What is Barter system ? Describe its difficulties.
2. Define and explain modem Theory of the value of money
3. Define Index number Explain uses and limitations.
4. Explain the rights and duties of banker and customer
5. Discuss the situation in which a bank can refuse to honor a cheque
6. Define Monetary Policy and also discuss its objectives
7. What is banking system? Explain different kinds of banks
8. Money banking and finance discuss its scope and importance with reference of B. com.
9. What is meant by owner’s finance ? Discuss its advantages Disadvantages.
10. Write short notes on the following.( Leasing , Musharaka , Near money , Stock Exchange
2004
1. what are the different stages in the evolution of money
2. Define letter of credit what are the different parties to a letter of credit also explain the procedure of opening a letter of credit
3. what is paper money describe its advantages and disadvantages
4. Define Inflation what are its cause discuss the means to control the inflation
5. what are the different function performed by the state bank of Pakistan
6. Define cheque write in detail about its different types
7. Discuss the Privatization of banks in Pakistan advantages and dis
8. Define Business finance and discuss the ad/dis
9.
Business Account
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