PRESENT VALUE (PV) In finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is always less than or equal to the future value because money has interest-earning … [Read more...] about PRESENT VALUE (PV) AND NET PRESENT VALUE (NPV) IN CAPITAL BUDGETING
LETTER OF CREDIT
INTRODUCTION Letter of Credit is a guarantee letter issued by a bank in international trade in favor of the exporter that a buyer's payment will be paid on time. If the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining … [Read more...] about LETTER OF CREDIT
LAWS RELATING TO BILL FINANCE
INTRODUCTION Bill finance is one of the major activities of the Banks. Under this type of lending, the Bank takes the bill drawn by the borrower on his (borrower's) customer and pays him immediately deducting some amount as a discount/commission. The Bank then presents the Bill … [Read more...] about LAWS RELATING TO BILL FINANCE
CAPITAL AND REVENUE EXPENDITURE
INTRODUCTION Accounting aims to ascertain the financial performance of a firm. To do so the transactions have to be identified as capital or revenue in nature. This will determine whether they are placed in the Profit and Loss Account or the Balance Sheet. Let us study about … [Read more...] about CAPITAL AND REVENUE EXPENDITURE
TYPES OF CHARGES ON SECURITIES IN LOAN ACCOUNTS
Introduction To safeguard their advances, the bank accepts different types of securities during the lending and creates charges upon them. When land/buildings and fixed assets that are permanently fastened to the earth are offered as a security, it is charged by a mortgage in … [Read more...] about TYPES OF CHARGES ON SECURITIES IN LOAN ACCOUNTS