Bcom Mcom Notes PDF

Money laundering:

"Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions."

Money laundering typically includes three stages: placement, layering and integration stage.

✏️Placement is the first step of money laundering which is the process of moving the money into the legitimate source via financial institutions, casinos, financial instruments etc. and at the same time, hiding its source.

✏️The second stage is “layering”, also referred as “structuring stage”. It breaks the funds into small transactions and makes it difficult to detect and find out about the laundering activity. It usually entails international money movement, so the law enforcement agencies won’t be able to track the financial gains from illegal proceedings so easily.

✏️The third stage is Integration stage, In this stage, money is now returned to the criminals legitimately after it has been placed in the financial system, often breaking it into different multiple smaller financial transactions. Criminals can now retrieve their illicit funds in a legal way after fully integrating them into a legitimate source, and are able to use them for any purpose.

"Anti-money laundering (AML) refers to the laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income."

⏺Prevention of Money Laundering Act (PMLA), 2002 is an Act of the Parliament of India enacted by the government to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005.

➡️ Aggregate Demand and its Components

Aggregate demand is the sum of all final goods and services, minus intermediate goods and services, that are available to final users within a country at a given point in time. This is the total dollar value of all purchases of both household and business spending and government spending. Aggregate demand can be generated by changes in income (factors affecting expenditure) or any combination of other factors that change how much people spend on various goods and services.

✅Components Of Aggregate Demand
There are four components in Aggregate Demand
➖Private Consumption Expenditure (C)
➖Investment Expenditure(I)
➖Government Expenditure(G)
➖Net Exports (X-M)

✅Aggregate Demand = C+I+G+(X-M)

➖Private consumption expenditure (C) or Household consumption expenditure
It refers to the expenditure on the final consumer’s goods and services by the households to satisfy their wants.

➖Investment expenditure (I)
It refers to the expenditure incurred on capital goods by private firms to increase their production capacity. These capital goods are in the form of machinery, building, land, etc.

➖Government expenditure (G) refers to the expenditure incurred by the government on the purchase of goods and services to meet the needs of the people in the economy.

➖Net Exports (X-M) It refers to the difference between exports and imports i.e., X-M
Where X stands for Exports and M stands for Imports.


✅Aggregate Demand In Two-Sector Model
In a two-sector model, it is assumed that Aggregate demand is a function of Consumption and Investment also.

Aggregate Demand In Two-Sector Model = C+ I

Where,
C= consumption expenditure
I = Investment


✅Important Concepts About Aggregate Demand
➖Aggregate demand is a function of Consumption and investment only.
➖The investment expenditure is assumed to be autonomous which means it will remain constant at all the levels of income.
➖The investment curve will be a straight line, parallel to the X-axis as it is not affected by the change in income level.
➖Consumption will be positive even at zero level of income as the minimum level of consumption is done for survival. This consumption is known as ‘Autonomous consumption’.
➖The slope of the consumption curve is positive which shows that when income increases consumption also increases.
➖The starting point of the AD curve is above zero as there is always a minimum level of consumption and investment in the economy.

✅ QUICK FACT COMPUTER : ONE LINER

1. Father of Computer - CHARLES BABBAGE
2. Father of Modern Computer Science - ALAN TURING
3. First Un Programmable Digital Computer - ATANASOFF BERRY COMPUTER (ABC)
4. First Electronic Digital Computer - ENIAC
5. ENIVAC stands for - ELECTRONIC NUMERIC INTEGRATOR AND CALCULATOR
6. World'S Fastest Computer - Sunway TaihuLight, in China.
7. India's Fastest Computer - PARAM SIDDHI AI
8. PARAM SIDDHI AI developed by - Centre for Development of Advanced Computing (CDAC)

💻 GENERATIONS OF COMPUTERS :

1. First Generation - (1940-56) - Vacuum tubes - Batch processing OS
2. Second Generation - (1956-63) - Transistors - Multi bag / Time sharing OS
3. Third Generation - (1964-71) - Integrated Circuits - Timesharing/ Real time OS
4. Fourth Generation - (1971-80) - Microprocessors - Real time/ Multi programming OS
5. Fifth Generation - (1980- present) - Semi conductors - Real time/ Multi programming OS

🕹 GENERATION LANGUAGE :

1st - Machine and Assembly language
2nd - Assembly language and high level languages (FORTRAN , COBOL)
3rd - High level languages (FORTRAN II - IV , COBOL , PASCAL , BASIC, ALGOL68)
4th - High level languages(FORTAN 77 , PASCAL , COBOL)
5th - High level languages(C , C++ ,JAVA , .NET)

📝 Balance of Payments

Balance of payments or BoP, is also known as balance of international payments. It is a statement that records all the monetary transactions that take place between a country’s residents and the rest of the world during a given period.

There are three components of the balance of payments (BoP).

▪️ Capital account
▪️ Current account
▪️ Financial account

Capital account includes the non-financial sale and purchase of assets and the flow of taxes. The main components of the capital account are forex reserves, investments, and loans.

Current accounts deal with the sale or purchase of goods that can either be raw materials or manufactured goods. This account is meant for daily transactions to keep the flow of money smooth, and get and make payments on time.

Financial account deals with the monetary inflows and outflows pertaining to the investments made in various sectors such as foreign direct investment, real estate, or other business ventures.

Ideally, the current account should be balanced with the combination of the financial account and capital account.

In theory, BoP should be zero, but it rarely happens. Therefore, BoP is used to determine whether the country is having surplus or deficit and the sections that cause this surplus or deficit.

The balance of payments formula can be expressed as follows:

Balance of payments = Balance of current account + Balance of capital account + Balance of financial account + Balancing item

BoP surplus means that exports are more than imports. In contrast, a BoP deficit indicates that imports are more than exports.

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Book keeping : Bookkeeping involves identifying, measuring, recording & classifying financial transactions in the ledger accounts.
Accounting : In addition to bookkeeping, Accounting also includes summarizing, interpreting and communicating the financial data to the users of financial statements.
Accountancy : Accountancy refers to systematic knowledge of the principles and the techniques which are applied in Accounting.

Qualitative Characteristics of Accounting Information
• Reliability: Reliability implies that the information must be free from material error and personal bias.
• Relevance: Accounting information must be relevant to the decision-making requirements of the users.
• Understandability: Information should be disclosed in financial statements in such a manner that these are easily understandable.
• Comparability: Both intra-firm and inter-firm comparison must be possible over different
time periods.