Economic Goals

Economic policies are made to achieve following economic goals.
• It means to produce better goods and services and to develop a higher standard of living of the people.
• To provide suitable jobs for all citizens who are willing and able to work.
• To achieve maximum fulfillment of wants, using available productive resources.
• To avoid large upswings in general price level that is to avoid inflation and deflation in the economy.
• To guarantee that business, workers and consumers have a high degree of freedom in their economic activities.
• To ensure that no group of citizens faces poverty while most enjoy abundance of wealth.
• To provide for those who are disabled, chronically ill, aged, laid off from jobs or otherwise unable to ear minimum levels of income.
• To have overall balance of payments in international trade and financial transactions.

Scheduled Banks

The word ‘Scheduled’ means a list. The banks which are registered in the list of central bank under its charter are called scheduled banks. They provide banking services according to the policies and instructions of central bank.

In other words scheduled banks are those which by virtue of financial position are included in the schedule of the banks maintained by the central bank. Every scheduled bank has to fulfill certain conditions. It is also known as a member bank.

Bank Reconciliation Statement

Cash Book is one of the special books, which business organization generally maintain. Along with the receipts and payments of cash, Cash Book also shows deposits, cheque payments and balance of cash at bank. As the business keeps its bank account by maintaining cash book, similarly bank keeps the record of its account holder through maintaining Pass Book. For instance, a cheque deposited into bank is shown in both the record of business (i.e. Cash Book) as well as in the record of the bank (i.e. Pass Book). Similarly, if cheques are issued to a supplier and presented in bank, it will be recorded in Cash Book and also in the Pass Book.

Bank issues a statement of bank account to the account holder. The Cashier can check whether the records shown in bank statement are tallying with the records in his Cash Book. As the case stated above if the deposits and withdrawal are found correct both in Cash Book and the Bank Statement then there should be no difference between the balances of Cash Book and the bank statement. Nevertheless, the balances shown in the Cash Book and the bank statement are sometimes different. Why this difference? For example, The Cash book shows balance of $20,000 on January 31, 2007. A cheque for $10,400 was issued to a creditor. The creditor did not present the cheque to the bank by the end of the month. The Cheque was recorded in Cash Book when it was issued by cashier, but obviously it could not be recorded in Pass Book in January 2007. So the balance as per bank statement will not be $20,000 as the cash book shows.

That is why; Bank Reconciliation Statement is prepared to reconcile the differences between the balances of Cash Book and the Bank Statement.

What is Accounting?

Accounting is the process, applied in a business which comprises recording the data, classifying and summarizing the data, presenting the results to the owner(s) of business.

During business, events like receiving cash from customers, payments to supplies, purchasing goods for sale out, sale of goods, salaries, wages and so on take place. These events as mentioned are generally called transactions. Every transaction concerned with receipt and payment of cash or otherwise, must be recorded in the books. The books in which such transactions are recorded are General Journal and Subsidiary Books like Cash book, Sales Journal, Purchase Journal etc.

The Transactions, which are recorded in General journal and Subsidiary books are then sorted and arranged for analyzing. Moreover, these individual accounts are balanced-off and list of these balances is prepared which is termed as Trial Balance. These records are kept for the purpose of calculating profit or loss. Likewise, they want to know how much the share of recources is owned in the business. Financial statements like Trading and Profit & Loss account and balance sheet are prepared for achieving these objectives.

After preparing financial statements, the finance/accounts managers clarify the business position to the owners. They convey to them the strong and weak points of the business.