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Credit Creation

Credit Creation or creation of credit is a process by which the money supply of a country or particular region is expanded with the help of the commercial banks.  The Central Bank of any country is entrusted with the job of printing money, either notes or coins. To initiate the money supply in the country, the central bank primarily depends on the commercial banks of the country, whose primary function is accepting deposits and granting loans. Through the use of these primary functions, these banks set the path for credit Creation. Process of credit Creation The commercial banks grant credits with the use of the deposits made by their customers, keeping aside a certain amount of money as reserve as mandated by the central bank of the country. Through this they start the process of credit creation. The banks after approving the loans, create a deposit in the borrower's name, which the borrower can use by either withdrawing once and all or in turns. The borrower further makes payment...
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Branch Accounting Solution Q.5 Basu & Das

  Solution No. 5: In the books of Sri. B Banik, Kolkata Mumbai Branch A/c Date Particulars J.F. Amt. Date Particulars J.F. Amt. 1.4.20 To balance b/d     Stock     Debtors To Goods Sent to Branch To Bank A/C (expenses) To Branch Profit     24000 6060 30000   10400   12100       31.3.21 By Bank -Sales -Collection from            Debtors By Balance c/d        Stock      Debtors     17500 37900   18000 9160 82560 82560 Branch Debtors A/c Date Particulars J.F. Amt. Date Particulars J.F. Amt. 1.4.20 ...
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Bailment

Bailment Definition   Bailment is defined in the Section 148 of the Indian Contract Act, as " A bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed off according to the directions of the person delivering then." Bailor : The person delivering the goods. Bailee : The person to whom they are delivered. Examples: Hiring of goods, delivering a watch for repair, keeping important documents or expensive ornaments in a bank locker.  Essential Features 1. It is a delivery of movable goods by one person to another: The goods that are being delivered need to be movable, the delivery can be both actual or constructive. When the bailor hands over to the bailor physical possession of the goods, this is called actual delivery. Constructive delivery is when the goods are not physical handed over, rather something is done which puts the goods in the possession of the...
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Branch Accounting and its need

Branch accounting Q. What is a branch? A. A branch may be defined as a section of an enterprise, geographically separated from the rest of the business, controlled by a head office, and generally carrying on the same activities as of the enterprise. A branch is not a separate legal entity, it is simply a segment of a business. Q. What is branch accounting? A. Branch accounting is a bookkeeping or accounting system in which separate accounts are maintained for each branch or operating location of an organisation that allows geographically dispersed corporations, multinationals and chain operators, to keep track of financial transactions at each branch individually and also to consolidate the same at the main branch or head office. It allows greater transparency in the transactions, cash flows, and overall financial position and performance of each branch. Q. Why is branch accounting needed? A. An enterprise sets up its branches at different geographical locations to penetrat...
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