Commerce Point Tution Classes

DISCOUNT
It is a rebate given by the seller to the buyer. It is of two types
🎲TRADE DISCOUNT : when discount is allowed by a seller to its customers at a fixed percentage on the list price of the goods. It is not recorded in the books of accounts.
🎲CASH DISCOUNT : when discount is allowed to the customers for making prompt payment. It is always recorded in the books of accounts.

ESSENTIAL ELEMENTS OF PARTNERSHIP
✡ Two or more person
✡ agreement
✡ sharing of profit
✡existence of business
✡ relationship of principal and agent

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Commerce Point Tution Classes Commerce tution classes in Patiala

PROVISION IN ABSENCE OF DEED
🖌️ Interest of capital is not paid .
🖌️Interest on drawing not allowed.
🖌️Not salary, commission to any partner.
🖌️Profit is to be share equally.

DIFFERENCE BETWEEN BALANCE OF TRADE AND BALANCE OF PAYMENT.
⚫ Balance of trade is a part of balance of payment, hence it is a narrow term And balance of payment is a broad term .
⚫ Deficit balance of trade can be met by balance of payment but deficit of balance of payment cannot met by balance of trade.

BALANCE OF PAYMENT
Balance of payment is a statement of accounts showing all monetary transactions of a country with the rest of the world during a period of time generally one year .

DEFINE MONEY
Money performs many functions but the most important and the basic of this is that money is commonly accepted as means of payments.on the basis of these functions Money is defined as generally accepted as a medium of exchange . everyone accepts money because they are assured that other will also accept it for the things they want to purchase.

ARTICLE OF DISTINCTION
This fact was analysed by 'veblan' according to him, article of distinction like gold and diamond etc. have more demand if their prices are high, it is because the Creamy layer of the society i.e. rich people while demanding these goods feel that they are aquiring an uncommon good, the uncommon nature signified by its high price. Thus, demand rises even if the prices increases.

RELATION BETWEEN TOTAL UTILITY AND MARGINAL UTILITY
🖌️When total utility increases marginal utility diminishes
🖌️When marginal utility is zero total utility is maximum .
🖌️When marginal utility is negative than total utility decreases.

PROCESS OF ACCOUNTING

1)identification of transaction .
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2) preperation of vouchers.
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3) recording in books of original entry.
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4) posting to ledger.
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5) preperation of trial balance and financial statements.

Accounting equation
Assets =liabilities+capital

DIFFERENTIATE BETWEEN ASSETS AND GOODS
📝Goods are purchased for resale whereas assets are held for continued use in the business .
📝Goods are always tangible i.e, they can be seen and touched whereas assets may be both tangible and intangible .