Extra Learning
description
Transcript of Extra Learning
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Extra Learning
Li, Jialong
2011-5-10
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Contents
Banking System Financial Policy Financial Control International Settlement Financial Markets Official Record of International Business
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Banking System
1. Functions of Central Bank (the Bank of England) (1A)
1) Central bank
2) Bankers’ bank
3) Lender of last resort
4) Market intervention
5) International role
6) Domestic supervisory responsibilities
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Banking System
2. The Federal Reserve System (U.S.) The three benefits of member-banks in the
Federal Reserve System (1B)
1) Check clearance
2) Electronic Fund Transfer
3) Borrowing Ability
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Financial Policy
1. FISCAL POLICY
Government revenue ---- Tax and tariff (income, change tax’s rate)
Government expenditure ---- Government Budget (budget deficit)
Government borrowing ---- Government Bonds
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Financial Policy
2. MONETARY POLICY
(1) Discount Rate (Interest Rate) (2C): The equation or formula: Simple interest: I = P x R x T (Principal amount, interest rate a
nd time usually year) Less than a year: I = P x R x Days/360 Compound interest: FT = P (1+R)T ( F—the future total repay
ment value of the loan)(2) Reserve Rate (2A) : the multiplier theory (Total $ = Initial $ x 1/Fractional Reserve
Rate or Requirement)(3) Money Creation (Direct Money Supply) (2B)
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Monetary Aggregates (The Three Ms)
M1 M2 M3
Main Items Currency, Coin Demand deposit
(Checking account)
Besides M1Savings and small
time deposits,MMDA, MMMFShort-term money
market assets
Besides M1 and M2
Financial assets and
instrumentsJumbo
certificates of deposit
Main Purpose Transaction orMedium of exchange
Mainly savingSecondly
transaction
Investment
Cashing Ability
Immediately Short-term Long-term
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Review Questions
How do the government budget deficit, and the adjustment of discount rate, reserve rate and money supply influence respectively the inflation, unemployment and general economic activity?
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Financial Control
Financial Statements
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity
The Bookkeeping Bank Deposits
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Summary of Financial Statements
Items What to tell?Time
descriptionMetaphor
Investment ways
Balance sheet Lists of assets, liabilities, and owner’s equity
Specific date (end of a month or a year)
A snapshot
A pool with some water
Entrepreneur
Income statement Summary of the
revenues and expenses
Specific period (a month or a year)
A moving picture
Change of water amount in the pool
Shareholder or stockholder
Statement of cash flows
State of inflow and outflow of cash
Specific period (a month or a year)
Intake and outlet of the water
Loaner or lender
Statement of owner’s equity
Summary of changes in owner’s equity
Specific period (a month or a year)
The money get or made from the water
Opportunistic stockholder
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EXAMPLE OF CHART
OF ACCOUNTS
(Accounts
List)
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Chart of Accounts
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Chart of Accounts
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Chart of Accounts
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The Classification of Ledge Accounts
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The Classification of Ledge Accounts
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Double Entry Principle
Assets (资产 ), Cost (成本 )
Debit (+ ) Cash Credit (- )
Beginning: 100
1000 (+ )
Total: 1000
600 (- )
Total: 600
End: 500
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Double Entry Principle
Liabilities & Owners Equity (负债与所有者权益 )
Debit (- ) Accounts Payable Credit (+ )
Beginning: 1000
500
Total: 500
2000
Total: 3000
End: 2500
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Double Entry Principle
Revenue (收入 )
Debit (- ) Sales Credit (+ )
5002000
Total: 500 Total: 2000
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Double Entry Principle
Expenses (费用 )
Debit (+ ) Administration Credit (- )
2000500
Total: 2000 Total: 500
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Double Entry Principle
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Judgement of Debit & Credit
AssetsCostsExpenses
Debit (+ ) Credit (- )
CASH
Liabilities Owners EquityRevenue
Credit (+ ) Debit (- )
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Double Entry Cases
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Double Entry Cases
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Double Entry Cases
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Double Entry Cases
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Ledger Entries & Proper Journal
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Ledger Entries & Proper Journal
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Trial Balance
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Trial Balance
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Trial Balance
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Trial Balance
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Trial Balance
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International Settlement
I. The Means Of Payment
Mainly: cash and bills
A. Cash Or Currency
1. Three kinds of currencies for payments
1) Home currency
2) The currency of the other country concerned
3) Foreign currencies: hard currency, soft currency
2. Main foreign currencies used in our foreign trade
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International SettlementI. The Means Of Payment
Mainly: cash and billsB. Bills 1. Bill of Exchange (or Draft) 1) Variety: a. Commercial bill (draft) and Banker’s Bill (Draft) b. Clean Bill and Documentary Bill c. Sight Bill and Time Bill Commercial Acceptance Bill and Banker’s Acceptance Bill
2) Circulation of draft a. To draw (issue) b. Presentation c. Acceptance d. Payment e. Endorsement f. Dishonor: protest
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Sample Draft
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Sample Draft
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International Settlement
I. The Means Of Payment
Mainly: cash and bills
B. Bills
2. Promissory note
1) General promissory note
2) Banker’s promissory note (cashier’s order)
3. Cheque (check)
1) Guaranteed check
2) Crossed check
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International Settlement
II. Payment Ways A. Remittance1. Four parties concerned: Remitter (Payer), Payee (Beneficiary), Remitting
Bank, Paying Bank2. Two relationship: Contractual relation between Remitter and Payer,
Agent relation between Remitting Bank and Paying Bank
3. Variety: 1) M/T ---- Mail Transfer 2) T/T ---- Telegraphic Transfer 3) D/D ---- Demand draft (or clear payment, or
simple payment)
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International Settlement
II. Payment Ways B. Collection 1. Variety: 1) Draft-collection (clean collection): a. at sight; b. after sight 2) Documentary collection a. D/P ---- Documents against payment a) D/P at sight vs. CAD ---- Cash against documents b) D/P after sight & T/R ---- Trust Receipt D/P, T/R b. D/A ---- Document against Acceptance 2. Collection Procedure 3. Four parties concerned and four relations 1) Principal 2) Remitting Bank 3) Collecting Bank 4) Drawee (Payer)
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Procedure Of A Documentary Collection
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International Settlement
II. Payment Ways
C. L/C ---- Letter of Credit
1. The six concerned parties and their relations
1) Applicant or opener
2) Opening Bank or Issuing Bank
3) Advising Bank or Notifying Bank
4) Beneficiary
5) Negotiating Bank
6) Paying bank, Drawee Bank
2. Payment procedure
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Procedure Of Settlement For Letter Of Credit
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International SettlementC. L/C ---- Letter of Credit 3. Variety
Revocable L/C and Irrevocable L/C Confirmed L/C and Unconfirmed L/C Sight L/C and Usance L/C
T/T Reimbursement Clause Banker’s Acceptance L/C vs. Deferred Payment L/C Usance Credit Payable at sight (Buyer’s Usance L/C)
Negotiation L/C and Sight Payment L/C Transferable L/C and Non-transferable L/C Revolving L/C Reciprocal L/C Back to Back L/C Anticipatory L/C or Red Clause L/C Documentary L/C and Standby L/C
Vs. L/G ---- Letter of Guarantee, or Bank Guarantee
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International Settlement
Question:
Why will the seller take more risks by using COLLECTION than by using LETTER OF CREDIT?
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Financial Markets
Currency Exchange
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Official Record of International Business
Balance of Payments
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The End of Extra Learning