Explore topic-wise InterviewSolutions in Current Affairs.

Trade acts as connective link between the producer and the consumer.

1. It acts as short term credit institution at the international level. 

2. It provides machinery for ordinary adjustments of exchange rates. 

3. It has a reservoir of currencies of the member countries from which a borrower can borrow currencies of other nations. 

4. It promotes economic stability and global growth by encouraging countries adopt sound economic and financial policies. 

5. It offers technical assistance and training to help member countries strengthen and implement effective policies. Technical assistance is offered in formulating banking, fiscal, monetary and exchange policies. 

6. It helps member countries correct their imbalance in balance of payment.

(a) Rural savings

Business owned and controlled by a single person is known as sole trading business.

The following are the characteristics of a sole trader:

1. Ownership by one man: This is owned by single person. The sole trader contributes the required capital. 

2. Freedom of work and Quick decisions: The sole trader is the owner, so he need not consult with others. Hence he can take quick decision. 

3. Unlimited liability: When his business assets are not sufficient to pay off the business debts he has to pay from his personal property.

4. Enjoying Entire Profit: All the benefits earned by the sole trader is enjoyed by him alone. 

5. Absence of Government Regulation: A sole trading concern is free from Government regulations. No legal formalities are to be observed in its formation and management. 

6. Maintenance of Secrecy: Since the trader manages all the affairs of the business, the secrecy can be maintained easily.

(c) Bullock carts

1. International finance helps in calculating exchange rates of various currencies of nations and the relative worth of each and every nation in terms thereof. 

2. It helps in comparing the inflation rates and getting an idea about investing in international debt securities.

3. It helps in ascertaining the economic status of the various countries and in judging the foreign market. 

4. International Financial Reporting System (IFRS) facilitates comparison of financial statements made by various countries. 

5. It helps in understanding the basics of international organisations and maintaining the balance among them.

(c) Road transport

(d) Pathways transport

Business risk arises due to a variety of causes which are classified as follows: 

1. Natural Causes: Human beings have little control over natural calamities like flood, earthquake, lightning, heavy rains, famine, etc. These result in heavy loss of life, property, and income in business.

2. Human Causes: Human causes include such unexpected events like dishonesty, carelessness or negligence of employees, stoppage of work due to power failure, strikes, riots, management inefficiency, etc. 

3. Economic Causes: These include uncertainties relating to demand for goods, competition, price, collection of dues from customers, change of technology or method of production, etc. Financial problems like rise in interest rate for borrowing, levy of higher taxes,, etc., also come under this type of causes as they result in higher unexpected cost of operation of business.

4. Other Causes: These are unforeseen events like political disturbances, mechanical failures such as the bursting of boiler, fluctuations in exchange rates, etc. which lead to the possibility of business risks.

The liability of the proprietor for the debts of the business is unlimited. The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.

(b) Ocean Transport

It is the type of transport called pack animals. Animals like horse, mule, donkey, camel and elephant are known as pack animals. They are used for carrying small loads in backward areas, hilly tracks, forest regimes and deserts. They serve areas which are inaccessible to modem means of transport.

Advantages of water transport:

1. It is the cheapest mode of transport. 

2. It is most suitable for heavy loads.

1. Railways are well suited for carrying heavy and bulky goods over long distances. 

2. It provides long distance travel throughout the day and night service.

3. It can provide better production and safety to the goods than motor transport. 

4. Though initial investment is large, in the long run the operating expenses will be very low in railways and it will prove a cheaper mode of transport. 

5. It has regular schedule of timing and is available throughout the year.

6. It provides unaffected services whether rainy or sunny weather conditions.

Advantages of railway transport: 

1. Railways are well suited for carrying heavy and bulky goods over long distances. 

2. It can provide long distance travel throughout the day and night with unbroken services.

Advantages of inland waterways:

1. It is considered as the cheapest mode of transport among the other modes of transport. 

2. It is most suitable for heavy loads.

Advantages of air transport:

1. It provides a regular, convenient, efficient and quick service. 

2. Perishable goods like fruits, vegetables, egg, meat, etc., can be transported quickly.

(b) Voyage charter

Trading on equity refers to an increase in earnings per share , I.e , dividend earned by the shareholders which is done b borrowing money(debt) at a lower cost. It can be done only when money can be borrowed cheaply,I.e ,when rate of interest on debt is lower than return on investment .

The paper based ownership and transfer of securities was a major drawback of the Indian securities markets since it often resulted in delay in settlement and transfer of securities, leading to bad delivery‘, theft, forgery etc. The rapid growth in number and volume of transactions in the securities markets further highlighted the limitations of handling securities in the physical/ paper mode. As a result, in line with the developments in the securities industry worldwide the paper based settlement and clearing system was replaced with depository system or scrip less trading system. This transition was facilitated by the Depositories Act, 1996.

Objectives:

(a) Making securities of public limited companies freely transferable subject to certain exceptions;

(b) Dematerializing the securities in the depository mode.

(c) Providing for maintenance of ownership records in a book entry form. In order to streamline the settlement process, the Act envisages transfer of ownership of securities electronically by book entry without making the securities move from person to person.

The terms used in the Act are defined as under:

(a) Beneficial owner means a person whose name is recorded as such with a depository. 

(b) Depository means a company, formed and registered under the Companies Act, 2013 and which has been granted a certificate of registration under sub-section (1A) of section 12 of the SEBI Act, 1992.

(c) Issuer means any person making an issue of securities.

(d) Participant means a person registered as such under sub-section (1A) of section 12 of the SEBI Act, 1992.

1. It is considered as the cheapest mode of transport among the other modes of transport. 

2. It is most suitable for heavy loads.

Occupation of a bank official is Employment.

(c) Dock warrant

1. Sole trading concern 

2. Partnership firm 

3. Joint Hindu family business

1. Active partner 

2. Sleeping partner 

3. Nominal partner 

4. Partner in profits only

(a) Integrated Goods and Services Tax

The interest of partner’s capital A/c is to be credited to Partners capital A/c.

As per the Section 78 of the Companies Act of 1956, the amount of securities premium can be used by the company for the following activities:

(a) Dock authorities

Public Company is not- for- profit organisation.

Bill of lading

Capital receipts – endowment fund, lagacies. 

Capital payment – fixed assets purchases, investment.

Outstanding subscription is Assets.

Waybill is a document acknowledging the receipt of goods by a carrier. 

4. Shipment advice

In this system the capital of the partners remains constant or unaltered unless additional capital is invested or capital itself is withdrawn by mutual agreement.

Legacies should be treated as A liability

1. Bill of Lading 

2. Certificate of origin 

3. Export Invoice/Foreign Invoice 

4. Dock Receipt 

5. Airway Bill 

6. Bill of Entry

3. Bill of entry

1. Shipping bill

It is a ratio sacrificed by the old partners to the new partner.

2. Mate’s receipt

Partners Loan A/c Dr. 

To Cash/Bank A/c 

[Being Partner Loan A/c closed]

It show inflow and outflow of cash and cash equivalents from various activities.

1. Equity shares 

2. Preference shares.