Simple Illustration of Profit And Cash Concept

It is important to understand the difference between Profit and Cash concept. Below a simple question to test you on this profit and cash concept: ABC sells computer on a retail basis. The firm began operations during December 2010 and sold computer for cash of $330,000. The computer that was sold by ABC was delivered … Read more

Explain briefly the difference between Statutory Reserves and Non-Statutory Reserves

In a balance sheet, we often see reserves been categorized into statutory and non-statutory reserves. Statutory reserves are reserves a company is required to set up by law and which are NOT available for the distribution of dividends And Non-statutory reserves are reserves consisting of profits distributable as dividends, if the company so desires. This … Read more

What are the Books Maintained in non-trading organizations

Non trading organizations normally maintains the following books for their operations: Register of members Minutes Book for recording the proceeding of meetings A cash receipt journal with separate columns for donations, entrance fees, subscriptions, Receipts for special programs or Funds, special receipts for Billiards, Tennis, Swimming and Bank transactions A cash payment journal with separate … Read more

In economics, briefly explain what is nominal and real income

Nominal income or money income  is income expressed as a number of monetary units like money wagesWhereasReal income is what the money income can actually buy on the market. Real income is the actual purchasing power reflecting the goods and services that it can command. Illustration: Say the monthly household’s monthly income is $4,000 which … Read more