What are accounting errors?
Types of accounting errors include ‘Error of principle’,’ Error of Omission in accounting’, ‘Error of commission’, ‘Compensating Error’, ‘Error of original entry’, ‘Complete reversal of entries’. Error of principle in accounting: When correct amount is posted to wrong type of account, such error is called error of principle. Suppose machinery installation charges is debited to…
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What is Tier 2 capital?
The Capital of a bank is divided into different tiers according to the characteristics / qualities of each qualifying instrument. The Basel III framework tightens the capital requirements by limiting the type of capital into two categories viz. Tier I and Tier II for supervisory purposes of capital. The Tier II or Tier 2 capital…
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What is meant by ‘Buy low Sell high’?
The maxim practiced by the banks is “Buy Low Sell High” for direct quotations and “Buy high Sell Low” for indirect quotation. Let us take an example of a fruit vendor who purchases apple from the market at 1 KG apple for Rs.75 and sells the same to his customers at 1KG apple for Rs.90/-.…
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What are Direct and Indirect quotes in foreign exchange transactions?
There are two ways to quote a currency pair, known as direct quote and indirect quote. A direct currency quote or home currency quote is simply a currency pair in which the domestic currency is the quoted currency and the foreign currency is the base currency. In the other words, the direct quote varies the…
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What are cash rate, tom rate, spot rate and forward rate?
Cash/ready rate, tom rate, Spot and forward rates are settlement prices of cash, tom, spot & forward contracts. The cross rates are exchange rate between two currencies computed by reference to a third currency, usually the US dollar. For example, USD is used to compute a business transaction between India and Germany although USD is…
Investments in Sukanya Samriddhi Account
What is Sukanya Samriddhi Account scheme? Sukanya Samriddhi scheme is launched with a view to encourage savings and to promote the education of girl child. The money saved under the scheme will be convenient for pursuing higher education of girl child and incentives to parent/guardian under the Income-tax Act. Who is eligible to open Sukanya…
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