Paragraph 1: Historical Cost Accounting vs. Current Cost or Replacement Cost Accounting
-Recording assets at their original purchase price, minus accum13ulated depreciation charges.
-Valueing assets (and related expenses like depreciation) at the price that would have to be paid to replace them (or to buy a more modern equivalent) today.
Paragraph 2: Three Financial Statements
-Profit and Loss Account or Income Statement
-Cash Flow Statements
Paragraph 3: Profit and Loss Account or Income Statement
-The profit and loss account (GB) or income statement (US) shows earnings or income and expenditure. (REVENUE S-EXPENSES= NET INCOME.):
-REVENUES>EXPENSES= ...view middle of the document...
- offering stockbroking and portfolio management services
-making their profits from the fees and commissions they charge for their services.
Paragraph 3: Universal banks (h)
- combining deposit and loan banking with share and bond dealing and investment services,.
Paragraph 4: Interest rates (h)
- A country’s minimum interest rate is usually fixed by the central bank.This is the discount rate
-Banks lend to blue chip borrowers at the base rate or the prime rate; all other borrowers pay more, depending on their credit standing (uy tín tín dụng) (or credit rating, or creditworthiness): the lender’s estimation of their present and future solvency.
- Borrowers can usually get a lower interest rate if the loan is secured or guaranteed by some kind of asset, known as collateral.
Paragraph 5: Eurocurrencies (h)
-A Eurocurrency is any currency held outside its country of origin (e.g. yen in the US, euros in Japan).
Paragraph 1: The reason why people form limited companies
-This is why most people doing business form limited companies:
-A limited company is a legal entity separate from its owners, and is only liable for the amount of capital that has been invested in it.
-If the assets don’t cover the liabilities or the debts, they remain unpaid.
Paragraph 2: Private limited companies
-Putting up the capital themselves, or borrowing from friends or a bank,
-Writing a Memorandum of Association (GB) or a Certificate of Incorporation (US), which states the company’s name, its purpose, its registered office or premises, and the amount of authorized share capital.
- Writing Articles of Association (GB) or Bylaws (US), which set out the duties of directors and the rights of shareholders (GB) or stockholders (US).
Paragraph 3: Public limited company or listed company (công ty niêm yiết)
-Newer and smaller companies usually join “over-the-counter” markets,
-Very successful businesses can apply to be quoted or listed on major stock exchanges.
-Fulfilling a large number of requirements, including sending their shareholders an independently-audited report every year.
Paragraph 4: Making a flotation
-The act of issuing shares (GB) or stocks (US) for the first time is known as floating a company -. IPO.
-Using an investment bank to underwrite the issue, i.e. to guarantee to purchase all the securities at an agreed price on a certain day, if they cannot be sold to the public.
Paragraph 5: The reasons why companies issue shares
-Raising more money for expansion which are normally offered first to existing shareholders at less than their market price. => This is known as a rights issue.
-Choose to capitalize part of their profit, i.e. turn it into capital, by issuing new shares to shareholders instead of paying dividends. => This is known as bonus issue.
Paragraph 6: The reasons why people buy shares
- giving its holder part of the ownership of a company.
-entitling their owners to vote at a company’s Annual...