In a business, purchases are made by the firm to keep a stock of goods for the purpose of reselling it to customers and also for producing other products. When the purchases are made, they are recorded in the purchase day book first which indicates the name of the supplier and other details as to the product bought. Thereafter, the total is transferred to the Purchases account every month from the Purchases Book. Purchase Book is a book of original entry, just like Journal. In fact, it is a … [Read more...]

Strategic Control is all about following the trail or movements of the strategy as it is implemented in order to identify the areas of issue or potential areas of the issue so that necessary adjustments can be made. On the other hand, operational control is a subset of management control whose aim is to regularly monitor and check the routine business operations so as to confirm the consistency and quality in business activities. Strategic Control focuses on attaining future goals and not … [Read more...]

Bad Debt refers to the sum due from the debtors, which remains unrealized, and so they are written off in the company's books of accounts. As against, doubtful debts refer to the debt, with which there is an uncertainty, as to the degree to which amount will be recovered from the debtor. Who are Debtors? Goods and services are sold for the purpose of generating revenue for the business. However, all the goods are not sold in cash, and goods on credit are allowed to a number of customers. So, … [Read more...]

The words 'expenses' and 'expenditure' are commonly used as synonyms, but there is a fine line of differences between them. While expense refers to the amount spent on the production or selling of the goods and services, so as to generate revenue, expenditure implies any type of disbursement of funds made by the enterprise. While expense denotes consumption of cost, expenditure indicates outlay of funds. It is worth noting that expenditure is a broad term that covers expenses. Further, the … [Read more...]

National Income, as the name suggests is the income of a nation, measured in terms of production, during the course of a financial year. Hence, when the production is represented in terms of final goods and services, it is called a National Product, whereas when it is represented in monetary terms, it is National Income. It tends to determine the quantum of economic activity carried out during the course of an accounting period. Contrarily, Domestic Income implies the summation of the factor … [Read more...]

In common parlance, supply means making something available or providing something. In economics, supply is used in the context of goods, it means the quantity of goods offered for sale by the producer, in the market at a given price and time. It is often contrasted with stock, which refers to the excess of goods present in the market over the goods supplied. While supply is obtained from stock, the stock is the result of production. In other words, the total quantity of finished goods … [Read more...]

When the management refuses to accept the demands of the employees or workers, due to which they mutually decide to stop working, and proceed to strike. Workers used this as a last option when they don't find any other way to convince the management, to agree to their demands. Talking about the other way round, when the employers are looking for domination over the workers and impose their terms and conditions on them, they keep them out of the business premises and stop them from performing … [Read more...]

In simple words, the standard of living implies the level of welfare provided to the residents of a country, i.e. it may refer to all those goods and services that people are able to consume and the resources they can access. On the contrary, quality of life indicates the welfare and well being of a person or group. Standard of Living is a quantifiable term, in the sense that it takes into account only material factors. As against, quality of life is a subjective assessment of how satisfied … [Read more...]

Factor Income refers to the income of means of production such as rent, wages, interest and profit, which accrues to land, labour, capital and entrepreneur, respectively. On the other hand, Transfer Income are the incomes which are not received by the person in the form of rewards for the services rendered, i.e. there is the transfer of money without the exchange of goods or services, National Income is the summation of all factor incomes earned by the country's residents during the period of … [Read more...]

The literal meaning of the word 'oligopoly' is 'competition among few'. Collusive Oligopoly is when the oligopolists come in formal or informal agreement with one another to avoid competition among themselves. On the other hand, in a non-collusive oligopoly, the firms tend to compete with each other, by setting their own price and output policy, which is independent of the other firms. What is Oligopoly? Oligopoly is a type of market characterised by a few firms offering either homogeneous … [Read more...]