Finance for bankers

1. Accounting & Finance for Bankers

13. Capital & Revenue Expenditure CAPITAL REVENUE Large amount Relatively small Improve or enhance earning capacity Maintain asset Long duration benefit Short duration Non- recurring recurring Balance sheet item Trading /P & L A/c item

21. Bill of Exchange Bill of Exchange Promissory Note Unconditional order Unconditional promise Made by creditor Made by debtor Acceptance by debtor must No acceptance as such Three parties to a bill Two parties to a bill Noting is not necessary On dishonor, noting is necessary by notary public

37. Distinction Receipt & Payment A/c Income& ExpenditureA/c Real Account Nominal Account All receipts & payment in a year Only income and expenses in a year Capital/ revenue items Only revenue items Starts with Opening cash & end with closing cash No op. balance but end with surplus/ deficit current,previous and next year Current year only