Key Financial Accounting Concepts Explained
Net Income
The residual amount of earnings after all expenses have been deducted from sales. In short, gross income is an intermediate earnings figure before all expenses are included, and net income is the final amount of profit or loss after all expenses are included.
Net Sales
Net sales represent total revenue, less the cost of sales returns, allowances, and discounts. This is the primary sales figure reviewed by analysts when examining a business’s income statement.
Statement of Cash Flows
A financial
Read MoreUS & European Banking Regulation History: 1900-Present
USA Banking Regulation: 1900-1920
Federal Reserve Act (1913)
- Composed of 12 Federal Reserve Banks.
- Established the Fed as the lender of last resort.
McFadden Act (1927)
Introduced geographical restrictions to the banking business.
Western Europe Banking: 1900-1920
Post-First World War Period
A flourishing period followed the peace treaty signature, but a recession occurred in 1920-1921.
Key Characteristics:
- Close links between banks and industrial corporations.
- Prevalence of the universal banking model.
Differences
Read MoreUAE Government Reforms and Economic Development
Chapter 8: UAE Reforms and Economy
Government Reforms Introduction
In line with the UAE’s rapid socio-economic developments, major steps have been taken, both at the federal and local levels, to reform the structure of government. This aims to make it more responsive to the needs of the country’s population and ensure it is better equipped to cope with the challenges of development.
This process has been directed at a federal level by President H.H. Sheikh Khalifa bin Zayed Al Nahyan, and devised
Read MoreCore Concepts of Money, Supply, and Monetary Policy
Understanding Money and Its Functions
- Store of value: Money allows transferring purchasing power into the future. However, it’s an imperfect store due to inflation eroding its value.
- Unit of account: Money provides the common terms for quoting prices and recording debts.
- Medium of exchange: Money is used to facilitate transactions for goods and services.
Money Classifications (Aggregates)
Money supply is often categorized into different aggregates:
- M0/MB (Monetary Base): Currency in circulation plus bank
Understanding Free Trade: Benefits, Barriers, and Commercial Policies
Free Trade and Barriers
Free trade (barriers to trade)
- Absolute and Comparative Advantage and Heckscher-Ohlin theory assume free trade and a perfect market (no tariff or differentiated taxes).
- Earnings from trade can be mathematically proven.
- Graphically: points of after-trade consumption are always beyond the PPF.
Gains from Free Trade
- Economic Gains: Increase in the standard of living and economic growth resulting from a country’s engaging in free international trade.
- Political Gains: Increases in
Understanding Economic Activity: Key Concepts & Systems
Understanding Economic Activity
Economic activity encompasses all human actions aimed at organizing the production, distribution, and consumption of goods and services.
Needs and Goods
Needs can be basic, such as food, housing, or energy, or non-essential, like a car. Goods are products, both tangible (food) and intangible (services), that satisfy these needs.
Resources
Resources are the natural substances and materials used to produce goods that meet human needs. These resources originate from the Earth’
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