BALANCE SHEET BASICS

Two financial statements are used by financial institutions to evaluate a company's loan application, the Income Statement and the Balance Sheet.

The Income Statement shows the sales (incoming revenues) and expenses over a set period of time. This statement is a good indicator of the profitability of a business during a particular period, as it shows the net result when the sales of the business are put against its expenses. The Balance Sheet, on the other hand, shows the business assets, liabilities and shareholder capital on a specific date, and as a result gives a good picture of a company's financial position.

In this article, we take a closer look at the balance sheet and what the numbers represent.

Assets

Assets are anything with commercial value that your business owns. They are divided into three categories: current assets, fixed assets, and other assets.

Current assets are cash, accounts receivable, inventory, and other assets that will likely be turned into cash, bartered, exchanged, or converted into an expense within a year during the normal course of business. Included in the “other current assets” category are loans to shareholders, also known as due to shareholders.

Some business owners will not pay themselves a salary, preferring to take drawings, which they must deal with at year-end. In the current assets section, due to shareholder amounts may artificially inflate current assets if you plan to convert them to bonuses, dividends or management fees at year-end, at which time they become expenses of the business.

Fixed assets have commercial value but are not expected to be consumed or converted into cash in the normal course of business. They are long-term, more permanent or "fixed" items, such as land, building, equipment, fixtures, furniture, and leasehold improvements.

Fixed assets often decrease in value (depreciate) over time due to wear and tear from use. The federal government allows businesses to depreciate items for tax purposes, and it has defined specific depreciation rates for different categories of fixed assets. On your balance sheet, therefore, you will see the initial value of the asset, the amount of accumulated depreciation, and finally the net depreciated value of the asset.

Example of a fixed asset on the balance sheet:


Vehicle $ 28,000
Accum Deprec - Vehicle $ -8,500
Total Vehicle $ 19,500*
* Net depreciated value of the vehicle.
Other assets are things that don't fit into either of the above two categories, yet still belong on the balance sheet. They include things like prepaid expenses, which have value but are not fixed or necessarily to be converted into cash value during the current business year.
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ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.
FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.
COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.

CONTACT:
0322-3385752
0312-2302870
R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN

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Liabilities

Liabilities are company debts or obligations to outside parties as a result of goods or services that were transferred to your company on a specific date that has already passed. Current liabilities are the portion of those obligations that are to be paid out during the course of the year, while long-term liabilities are the portion of your company's obligations that extend beyond that timeframe.

Current liabilities include accounts payable, accumulated taxes and payroll liabilities, and the current amount owing on business loans and/or leases.

Long-term liabilities, meanwhile, include the balance of your loans, leases, and other liabilities beyond the current calendar year.



The Intangibles

While Intangible Assets do not appear directly on your balance sheet, they can be a significant factor when one looks to buy or sell a business or part of the business. Intangible assets include things like good will; intellectual property such as copyrights, trademarks, patents; leases; franchises; permits and so on.

While you do not list these assets on your balance sheet, they are reflected in the sense that they enable you to maintain profit margins and market share, so in turn they show up on the current assets section of your balance sheet through the revenue and profits they create.



Equity

Something that is often difficult for new entrepreneurs to grasp is the way equity is calculated on the balance sheet, where the total assets always equal the total liabilities plus equity.

In other words, your company's equity is equal to the value of its total assets minus its total liabilities. If the business assets are greater than the liabilities, which is hopefully the case, then the equity of the business is the positive difference between the two numbers.




Sample equity calculation:
On Company ABC's Balance Sheet, the Total Assets are $100,000, while the Total Liabilities are $40,000. In this case, the difference between the assets and liabilities is $60,000. Since equity is equal to this difference, the equity of Company ABC at that time is $60,000.

If Company ABC had Total Liabilities of $50,000, with its Total Assets staying at $100,000, then the equity of Company ABC at that time would be $50,000. The increase in the total liabilities of the company in comparison to its total assets causes the equity of the business to drop.

***********************************

ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.
FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.
COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.

CONTACT:
0322-3385752
0312-2302870
R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN.

***********************************

MA-ECONOMICS SYLLABUS-UNIVERSITY OF KARACHI

MA-ECONOMICS FRESH CLASSES FROM 15TH FEBRUARY 2010
MICRO ECONOMIS & STATISTICS PREVIOUS
MACRO ECONOMICS FINAL

University Of Karachi
M.A. (Previous) and M.A. (Final) Examination
IN
ECONOMICS
SCHEME OF STUDIES
M.A. (Previous)
1. The examination for degree of Masters of Arts shall be taken in two parts; (1)
Previous examination and (2) (Final) Examination, each for One year’s
duration. Students passing the B.A. Honors (Three years course) Examination
will be eligible to take the M.A. Final Examination after on year’s study
without being required to pass the M.A. Previous Examination.
2. The Previous Examination shall consist of five papers, paper I_IV are
compulsory and one optional from paper V. Each paper shall be of 100 marks
and of 3 hour’s duration.
M.A Final
3. The M.A. Final Examination shall comprise five papers, paper I, II, III and V
are compulsory and one optional from paper IV. Each paper shall be of 100
marks and of 3 hours duration.
(M.A. Previous)
PAPER I
Micro Economics
1.Utility and preference:
A survey of the contribution of Utilitarian Economists. Marshall’s theory of utility.
Pareto and indifference curves. the ordinal character of utility_ Need for a theory
consistently based upon ordinal concept of utility. Marginal rate of Substitution.
Diminishing Marginal Rate of Substitution.
Preference in a two-commodity world. Choice in a two commodity world-Changes in
the Data (Budget changes) (Price changes). Three or more commodities. One
commodity and money. The Validity of this theory-Demand curves and various
Elasticities.
2. The General Equilibrium of Exchange:
Rational Economics and Equilibrium. Quesnay’s Tableau Economique. The classic-
Marshall & J.B Clark-Functional Equilibrium- Genetic-Casual Equilibrium Pareto’s
system as basic of study.
Problems of general equilibrium. Conditions of Stability of General Equilibrium.
Characters of hicks and condition of stability. Equilibrium and disequilibrium
3. Value
A Survey of the contributions of economists towards value theory-classical, Neo
classical, Up-to-date back ground of value theories. the place of prices in a Modern
Economy.
4. Market structures and Equilibrium.
Equilibrium of the firm and industry under perfect competition. Monopolistic
competition-monopoly in all its all its aspects-oligopoly with its problems and
solutions.
5. Introduction to games theory :
An introductions to games theory.
6. The theory of factor prices-Marginal productivity theory. Wages-theoris
problems. Interest theories problems profit-theories. Rent theories.
7. Welfare Economics.
Books Prescribed
1. J.R. hicks Value and Capital
2. J. Robinson Economics of Imperfect
3. E. H Chamberlin. Monopolistic Competition.
4. W. Fellner. Modern Economics analysis
5. Erol’o Fossati The theory of General static
Equilibrium
6. W. Baumol Economics Theory and
7. R. Dorfman. The PriceSystem
8. W. J. L. Ryan Price System.
9. K. E. Boulding Economics Analysis.
10. reading in the Theory American Economics
Association
11. Reading In The Theory of American Economic
Distribution Association
12. Eric Roll A History of Economics
Thoughts
13. E. Sehneider Pricing and Equilibrium
PAPER II
PUBLIC FINANCE
PART I
Government Activities and Expenditure :
1. Role Of Government In An Economy.
The Basic Economy Decisions. The Market Economic and the Attainment of
Economic goals. The Consideration Which have led to the undertaking of
Government Activity.
2. Optimum Levels of Government Activities .
Application of the marginal Rule . Use of Price System by Government
Measurement of community benefits. Estimation and measurement of Costs and
Benefits. Use of Optimum Techniques.
3. Government Expenditure.
Patterns and tends (With special reference to Pakistan).
Major Purpose in Government Expenditures causes of Real increases in
Government Expenditures. Effects and Policies of Government Expenditures.
4. Financing of Government Expenditures.
Sources of Government Revenues :
Sale of Goods and Services :Taxation ,Borrowing. The Developments and
Nature of Principal Taxation.
Taxation of Income :
Income Tax Deduction and Exemption Income Tax Rate Structure and Tax
Administration –The time Period Problem –Economic Consequences of Income
Shifting and Incidence—Sales Taxation
PART II
Government Borrowing and Fiscal Policy :
1. The Economics of Government Borrowing .Introduction to Fiscal Policy and
analysis. Anti-Inflationary Fiscal Policy. Fiscal Policy and Unemployment, debit
management in periods of Inflation.
PART III
The Budget and Modern Government :
1. Development of Modern Budgeting. Budget classification. Specialized Budget
Problems. Three objective of budget Policy—The Allocation Branch—The
distribution Branch and the Stabilization Branch.
Boxes Prescribed
For Part 1. (i) John F. Due. Government Finance. Richard
Irwin Inc., Relevant chapters.
(ii) A. R. Prest Public Finance, Weidenfeld and Ncolsion,
Loudon,1963(Part III Relevant Portions) :
For Part II John F. Due. Government Finance, Richard Irwin Ince,
Relevant Chapters.
For Part III. (i) Burkhead. Government of Budgeting Creasing and hall Ltd,
London,1956,Chapter 124 Relevant Portion.
(ii) Richard A. Musgrave. The Theory of Public
Finance, McGraw Hill Book Company Inc,
London. 1959,Chapt. I only.
PAPER III
Advanced Economic Statistics
1. Historical development of statistics. The scope of economic statistics,
Misuse of statistics, collection, classification tabulation and interpretation
Of data. Census of population and agriculture ; methods of measuring national
income.
2. Importance of diagrams and graphs bar, sub-divided rectangles, circles,
Graphs of time series and frequency distributions, histograms, frequency polygon
and curve, cumulative, frequency curve, percentage frequency curve, Lorenz
curve, Pareto’s law of income distribution.
3. Measures and dispersion, co-efficient of variation, relative importance of
different averages.
4. Idea of normal curve and its importance properties.
5. First four moments, Sheppard’s correction, skewnes and symmetry, calculation of
co-efficients of skeweess, Kurtosis.
6. Calculation of the co-efficients of correlation of grouped and ungrouped data.
Rank co-relation and idea of non-linear regression.
7. Index, numbers, weighted index numbers, Cost of living numbers.
8. Analysis of time series, methods for measuring short time oscillation, method of
least square.
9. Fiting a straight time and a parabolic curve of the type
y = a + bx $ y =ab --- x + cx2 theory pf sampling, random, stratified, multistage
and purposive sampling.
10. sampling distribution. Standard error and probable error. Simple illustration on
theory of probability.
11. Interpolation by the use of Lyngranges and Newton’s formula. Use of logarithms
and prices on Newton’s formula.
Books Prescribed
1. G. U. Yule and An Introduction to
M. G. kendail statistics.
2. K. D. Practical Problems in
Elbance statistics.
3. H. H. Arkin and An outline of statistical
R.R. colton Method
4. A. R. Hersic Statistics
5. J. Mounsay Introduction to statistical
Calculation.
6. Crowden and Applied General statistics
PAPER IV
Economic of Planning
Part 1
1. Principles of Planning :
(a) Theories of Economic development and their application.
(b) Definition and techniques of planning.
(c) Instruments of planning and role of various policy variables.
2. Evolution of planning for the acceleration of development process.
(a) Development experiences in west European Countries.
(b) Development experience in socialist countries.
(c) Development experience in under developed countries.
3. Patterns of developments planning:
(a) Indicative planning socialist planning and comprehensive planning
In a mixed economy.
(b) Annual planning, five years planning and perspective planning.
4. Preparation of development plan in an underdeveloped economy:
(a) Assement of country’s resources.
(b) Minimum of country’s resources.
(c) Need for foreign assistance.
(d) Plan strategy and target consistency.
(e) Sectoral allocations and interdependence.
(f) Input-Output exercise.
5. Implementation of a Development plan.
(a) Private sector : guide- lines government policies with special reference to fiscal
Monetary and foreign trade policies.
(b) public-sector : (i) Finance of the public sector development project via : (a)
taxation (b) inflation and (c) foreign aid.
(c) Public-sector expenditure on (a) infrastructure (b) social service and (c)
commodity production.
6. Evolution of planning experience :
With special reference to :
(a) Targets vs. achievements.
(b) Agriculture vs. industry.
(c) Public vs. private sector.
(d) Balance vs. unbalance growth.
(e) Growth vs. distribution.
PAPER II
PLANNING IN PAKISTAN
Evolution of planning process in Pakistan.
Objectives and techniques of planning. Use of models in programming.
National Resources and targets for national plans.
Price structure : Choice of policy instructions.
The role of public and private sector.
Estimation of capital requirements.
Sources of Capital formation.
Public & private sector, foreign capital inflow.
Method of Allocation of investment Resource.
Obstacles arising for investment choices sect oral constancy.
Strategies of growth, Balance of payment and foreign Aid.
Manpower recourses and its utilization.
Regional Balance.
This study will be mad in the light of the development plans of the country , specially
with reference to current plans.
Books Prescribed
1. Leading Issues in economic development by G. M. Meir.
2. Development Planning by W. A.Lewis.
3. Analytical Techniques of Economic development. A cases study
Of Pakistan by W. Times.
4. Strategy of Economic planning by Mahbub-ul-haque.
5. Planning Economic Development (Homewood,III,1960) by Hagen,E. E.(ED)
6. Planning for Economic Development by U. N. O.
7. Development Planning : Lessons from Experience by Waterstone, A.
8. Economic Planning in under-developed Areas by Mason,E. S.
9.
10. Economic Planning in Pakistan by waterstone,A.
11. The First Five-year Plan of Pakistan.
The Second Five year in Pakistan.
Preliminary Evolution of Progress during the second five.
Year plan. The Third Five year 4th
plan, 5th plan and 6th plan.
12. Pakistan, Development Review.
Pakistan Institute of Development Economic.
PAPER V-A
Economics of agriculture
PART—A
A Introduction to Economic of Agriculture :Definition concepts, tool and techniques.
B Demand and supply functions in agriculture.
Focal points and conditions of long—term shift in the demand curve, peculiaries
of demand-supply function in agriculture, farm price behavior.
Problems of price determination with reference to income effect, cobweb theorem
and relevant income elasticities.
(i) Input-output Relationship :
Choice and resource allocation criteria:
Resource—substitution and factor relationship:
Resource-combination and cost minimization:
Resource allocation and enterprise combination, chaise between product and
resource-use.
(ii) Resource Classification and other problems in aggregation :
Nature and types of cost curves:
Returns to scale and farm size;
Factors determining optimum size of farm;
Time-factor reward and resource valuation;
Economic planning and farm-size;
Agriculture and trade-prices;
The role of the state in regulation prices in developed and underdeveloped
Countries.
C. Problems of agricultural credit;
Credit and Agricultural development;
Form of credit;
Role of interest in agricultural credit vs. rate of interest in industrial credit:
Form-credit supply ;
Allocation and use of farm-credit ;
Credit institutions and marketing operations.
D. Economic Development and Agriculture;
Agriculture in a developing economy; measurement and evaluation with reference
To;.
(i) Population increase relating to income
(ii) Use of techniques employed by consuming units and
(iii) Rise in output effecting trade, and development
E. Land Organization income distribution and economic development.
PART II
AGRICULTURE OF PAKISTAN
A. PHYSICAL, INSTITUTIONAL CHARACTER OF AGRICULTURE
IN PAKISTAN.
Detailed study of Agricultural sector with reference to its 2nd & 3rd Five year
Plans, Land Unitization, Land man ratio, size of holding, income and standard
of living.
B. (i) LAND : Size of holdings, Farm mechanization, water-logging salinity,
quality and quality of inputs.
(ii) LABOUR: Rate of population growth and land ratio study of agricultural
labour force and its employment; possibility of its transfer to non-agricultural
sector, problems of agricultural wages.
(iii) CAPITAL: Availability and requirements of capital credit institutions
and their performance .The role of National and international agricultural
Credit institutions.
(iv) ORGANISATION: farm until and its layout, problem of sub division and
Fragmentation of holding, their consolidation scheme, Techniques of
cultivation, irrigation system, marketing operation, suggestion for
improvement, impact; stable, unstable prices on the growers; A study in
respective and prospect. Effect of Land Reforms and Tenancy Acts.
(v) Description of Major food and cash crops like food grains, Jule, Cotton,
Tobacco, and the evaluation of policies related to their management and
improvement.
(vi) Livestock and animal husbandry: A review of existing situation and
projection for future. The role of agro industries diversification, strengthening
and expansion of agricultural sector through establishment agro-industries.
(vii) Effect of agricultural production in the international Trade and Balance
of payment of Pakistan. Foreign Aid and agricultural development, food selfsufficiency
program.
Books Prescribed
(i) Economic of Production and Resource Use.
Earl O. Heady.
(ii) Contemporary Reading in Agricultural Economics.
Hal crow Prentice Hall Inc, New York 1955.
(iii) Outline of Agricultural Economics.
Henry C. Taylor (Macmillan Company)
(iv) The Economics of Agriculture Development J. W. Mellor
(v) Pakistan:- A Developing Economy.
S. M. Akhtar (Latest)
(vi) Demand and supply for Agrienitural Product in Pakistan
S. A. Abbas, Oxford University Press.
(vii) Chapter of 1st IInd IIIrd Five year Plane relating to Agricultural sector.
(viii) Economy of Pakistan.
Andrew and Muhammad, Oxford University press. London 1958.
Books Recommended
(i) The Economic of Agriculture.
R. L. Choed, London, 1959
(ii) Agricultural Marketing.
Fredrick Lundy Thompson, McGraw Hill Book Company,Inc.1951.
(iii) Introduction of Agricultural Economics.
Bishop and Toussaint.
(iv) Farm Management Economics.
(v) Agricultural Economics.
Benjamin Horace Hibbard, London 1956.
Government of Pakistan Publication.
(vi) (a) Report to the Government of Pakistan on Labour conditions
In Agriculture.
(b) Food and agricultural commission Report 1960.
(c) Report of the Land Reforms commission.
(d) Report of the Credit Enquiry Committee.
(vii) Agriculture and Economic Development.
Carl Ficher and Luwrence Witt.
Mcgraw Hill book Company New York.
(viii) Proceedings of 11th International Conference of agricultural Economic.
Oxford University Press, London.
(ix) CENTO Conference on Agricultural Extension, CENTO 1967.
(x) Developing Rural India Plane and Practice by John W. Mellor &
others.
(xi) Pakistan Development Review, Institute of Development Economics.
PAPER V-B
NATIONAL INCOME ANALYSIS AND
ACCOUNTING
PART 1
(i) Introduction :
Macro v/s Micro Economics, state Dynamic Concepts
Micro Economic Equilibrium Analysis and techniques.
(ii) National Income Concepts.
Real and Money income.
Circular flow of income, its component. Ways of calculating national
Income.
Gross and Net Product.
(iii) Conceptual Problem in the Estimation of National Income :
(a) Product to be included.
(b) Final and Intermediate Product.
(c) Valuation of the Production.
(iii) Accounting Frame work and national Income Aggregate.
(a) Income and production statement for firm.
(b) Sector account :National Income Aggregate as.
(1) G. N. P. and G.N.I.
(2) N.N.P at Market Price.
(3) G.N.P and Income
(4) N.N.I. as factor cost-and national Income.
(5) Personal Income and outlay.
(6) Disposable Income.
(c) Their definitions and uses for comparative Analysis.
(1) Structural (2) Comparative Analysis.
(3) Over Space.
(d) Critiesm of national Income Accounting.
(v) Other System of Economic Accounting :
(a) Input-output Techniques, Analytical consideration.
And form of input-output accounting table, uses of analysis based on
input-output relationship.
(b) Flow of Fund Accounting.
Rationale of Accounting Procedure, System of Sector Account and uses
(c) Use of National Income analysis for changes is
(1) Population (2) Production (3) Productivity
(4) Prices (5) Employment.
Part II
vi) National Accounting System of Pakistan:
Methods of National Income estimates in Pakistan.
Identification of Problems and suggested salution.
Part III
VII) Component of National Aggregate:
Simple Income Determinations Multiplier.
Factor Affecting Consumption Expenditure.
(b) Federal Policy and Income Consumption Expenditure.
Government expenditure. Taxation the Equilibrium Level of Income.
(c) Level of Investment.
Discounting and the present value of an asset. The inducement to invest.
Factors Affecting investment in spending.
(d) Money and Interest.
Interest and Investment.
General Equilibrium.
(e) Level of Employment.
(i) Factor’s market and classical Doctrine.
(ii) Keynesian Economics and the level of Employment.
(iii) Money Wages rates-employment. Full Employment.
PRESCRIBED BOOKS
Part I & II
1) R. Ruggle & M.D. Ruggles National Income Accounts and
Income Analysis
2) J.P.P welson National Income & Flow of Fund
Analysis.
3) A.J. Vandermenien & National Income Analysis &
D.C Vandermenien Sector Accounting.
4) W. H. Mier. Yk Input & output Analysis.
5) Sam Rosen National Income
6) R. M. Biggs National Income and Force Casting.
7) Parker & Harcurt Reading in the concept and .
measurement of national income.
8) S. C. Shoup Principal of National Income
Analysis.
9) Report of Pakistan 1965 National Income Commission.
Part II
10) J. S. Henderson National Income
11) C. L. Schultz National Income Analysis.
12) T. F Dernberg & Macro Economics
M. McDougal
13) E. Shapiro Macro Economics
14) G. Ackley Macro Economics
15) M. J. Balley National Income and Price Level.
16) K. E. Boulding Economic Analysis Part II
Macro Economics.
PAPER V-C
Mathematical Economics
1) Function and Diagrams in Economics Theory:
Introduction, Demand function and Curves, Particular Demand Function
and Curves. Total revenue functions and curves Cost function and curves.
Other functions and Curves in Economic Theory. Indifference curves for
consumer’s goods. Indifference Curves for the flow of income overtime.
2) Derivation & their Interpretation :
Derivatives and approximate value. Derivation and tangents to curves.
Second and higher order derivatives. The application of derivatives in
Economic Theory.
3) The technique of derivative :
The powers function and its derivation. Rules for the evaluation of
derivatives. The evaluation of second and higher order derivatives.
4) Application of derivatives :
The sign and magnitude of the derivatives. Maximum and minimum
values. Application of the second derivative practical method of finding
maximum value. Points of inflexion problems of monopoly and duopoly.
5) Logarithmic Derivation :
Derivation of exponential and logarithmic function. The elasticity of
function. The evolution of elasticties. The elasticity of demand. Normal
condition of demand cross elasticity and normal costs conditions.
6) Function of two or more variables :
Function of two variables. Function of more than two variables. Function
of several variables in economic theory. The production function and
constant product curves. The utility functions and indifference curves.
7) Partial Derivatives & their applications :
Partial derivatives of functions of two variables. Economic application of
partial derivatives. Ilomogeneous functions.
8) Differential and Differentiation :
The technique of differentiation. Differentiation of functions.
Differentiation of implicit function. The differentiation of a function of
more than two variables. The substitution of a factor. Substitutions in
other economic problems.
9) The cobweb & other simple Dynamic Models :
Cobweb model. A simple continuous model. Central features of the
model. Model with stocks.
10) Matrix Algebra :
Equalities, Inequalities. Addition & scalar products. Multiplication of
matrices. Inverse of a matrix, Determinant values. Equivalence and rank
of matrices.
Books Prescribed
1) R. G. D. Allen Mathematical analysis for
Economists chaps, V to XIII.
2) R. G. D. Allen Mathematical Economics
Chaps 1 & XII.
Books Recommended
1) G. C. Archibald A Mathematical Treatment of
Economics.
2) J. Perty Lewis An Introduction to mathematics for.
Students of Economics.
3) D. W Bushaw & W. Clower. Mathematical Economics.
PAPER V—D
Comparative Economic System)
Section I
Introduction
(a) An Introduction to the study of Comparative Economic system.
(b) Performance criteria for Economic system.
Prescribed Reading
1. Halm, George N. Economic system : A comparative
Analysis. Holt, Rinchart and
Winston, NEW YORK 1964
Part I chapter I.
2. Lucks, William N. Comparative Economics, Systems.
Harper International Student
Reprint, John Weatherhill. Tokyo,
6th edition Part I, chapter 1.
3. Bornsten, Morris (ed) Comparative Economic.
System: Model and cases Richard D
Irwid, Homewood, Illions, 1965,
Part I, chapter 1&2,
Section II
(a) Capitalism: Meaning and characteristics: historical Evolution: Major
Institutions.
(b) The Capitalist Economy: Working of the price system productivity:
Income Distribution: Monopoly: unemployment.
(c) An evaluation of the achievement and failing of capitalism. (case study :
United states of America)
Prescribe Readings
1 Loucks Part I chapters 2 to 4 and Part IX chapter 33.
2 Halm, Part II chapters 5 to 9.
3 Bornsection, Part II chapters 3 to 5.
Section III
Socialism and Communism
(a) Definition and concept: Brief outline of Historical Evolution of Socialism.
(b) Maximum theories of history, value and capitalist development.
(c) Economic theories of Democratic socialism.
(d) The soviet Economic: Problems of a centrally planed economy.
(e) Evaluation of the achievements and failings of Socialism in Russia.
Prescribed Readings:
Halm, Part III chapter 10 to 13; Part IV chapters 14 to 17; Part V; chapters 8 &
19; Loncks, Part III chapters 5 to 10; Part IV chapter 15 Part VI chapter 23 to
28; Ahmed Shaikh Mehmud, Economics of Islams, Ashraf , Lahor, 1964.
Bornstein, Part II chapter 6 to 12; Part III chapter 15 to 18.
Ahmed Shaikh Mehmud, Economics of Islams, Ashraf , Lahor, 1964. Bornstein,
Part II chapters 6 to 12 ; Part III chapters 15 to 18.
Section IV
Islamic Economy
(a) The nature of Islamic Economy; its goals and objectives;
(b) Principles relating to Property labour production and growth, consumption,
trade and marketing and economic organization. The working of the price
system in an Islamic economy.
(c) Interest and the problem of its elimination.
(d) Zakat and the principles of taxation; income distribution and social
responsibility.
(e) Economic functions of the state.
(f) Distinctive features of Islamic economy v/s-a-v/s capitalism and socialism.
Suggested Readings:
(1) Ahmed, Shaikh Mahmud, chapters II, IV, VI, and VII,
(2) Sharif, M. M. A History of muslim Physiology, Pakistan Philosophical
Congress. Otto Harrassowis Wiesbeden 1963, Volume I Book Two chapter
IX,pp. 178—190.
(3) Yusuffuddin, Dr, M. Islam Kai Ma’ashi nazaryat, Hyderabad, 1950 Volume I,
Chapter 3 and 4; Vol. II Chapter 4 to 7.
(4) Yousuf Abu, Islam ka Nizam-e-Mahasil. Tr. By Siddiqi, Nejatullah, Chiragh-e-
Rah, Karachi 1966.
Suggested Readings:
(1) Oxenfeidt, Alfred and holubuyeby, Vsezolod, Economic system in Action. Holt,
Rinehart and winstone New York, 1965, chapter1,2, and3.
(2) Ellis, Howard S. A survey of Contemporary Economic Richard. Dr.Irwin,
Homewood, Illionis. Vol I chapter 22 to 23.
(3) Weight, David Mac, Capitalism The McGraw Hill Book Co.
(4) Pigou, A.C, Socialism vs Capitalism the Macmillan Co. London.
(5) Sweezy Paul M. Socialism McGraw-Hill Book Co. New York 1949.
(6) Nove, Alec. The Soviet Economy, George Allen and Un-win London, 2nd
Edition 1965.
(7) Landure, Carl, Contamporary Systems, j.B, Lippincott Co, Philadelphla, 1964.
(8) Maududi, Abul Ala, sood, (Urdu), Islamic Publication Lahore.
(9) Maududi, Abul Ala, Islam and Jadeed Ma’ashi Nazaryat, Islamic Publication,
Lahore.
(10)Siddiqui, Nejatullah, Islam ka Falsafa Milkiyat, Islamic Publication, Lahore.
(11)Azhmides Nicoles. P. Mohammadan theories of Finance, The Prentice Book
Home, Lahore Part II.
(12)Qureshi Dr. Anwar Iqbal, Islam and the theory of Intrest, Ashraf, Lahore.
(13)Attaullah, Sheikh, Revlval of Zakat, Repon, Press, Lahore.
(14)Kutb, Syed Islam ka Nizam-e-Adl Tr.by Siddiqui, Nejatullah Islamic
Publications, by Al-Farooqi. Ismail R. Social Justice in Islam, American council
of Learned Societies, Washington, 1953.
PAPER V-E
Economics Of IslamSection – A
Descriptive
1. Nature of Islamic Economic
Islam and Economic
Basic principals of Islamic Economics
Islamic Principals and its comparison with capitalistic. And
Socialistic systems.
2. Social fram work of Islam
Value System Moral cade
Legal Fram Work
Economic Institutions
Problems of Social Integration and Islam
3. Evolution of Economics Through in Islam and brief introduction to the
writings of :
i) Qazi Abu yusuf
ii) Imam Mohammad
iii) Qazi Abu Ubaid
iv) Ibn Hazam
v) Shah Waliullah.
Section – B
Analysis
1. Consumer’s Behaviour:
Islamic Principals of Consumption and the Law of equimar ginal
utility.
Concept of austerity, in Islam and aggregative consumption.
2. Production:
Importance and goals of production
Organization of factors of Production and distinguishing features of
Islamic classification.
3. Demand and Supply Analysis:
Concepts of Value
Nature of Market & Market Behavior
Process of Price Cotermination
3. Distribution :
Determenation of the share of productive factors with special refrence to
the concept of Shirkyat and Mazarbat Problems of rent and retier class.
Wages rates
Intrests and Problems of its elimination
Concept of Profits
An introduction to the Islamic Concept of welfare and theory of
Distribution.
Section – C
Social Economics
i) Socio-Economic Objectie of the Islamic economy.
ii) Economic functions of the state.
iii) Concept of State ownership and economic control in Islam.
iv) Social security and welfare
Section – D
Public Finance
Source of income and their underlying principals taxation and specific taxes.
Principals of Public expenditure. Public dept.
Fiscal Policy :
Section - E
Money & Banking
Money credit and interest free Banking system.
Tenents of monetory policy in Islam.
Principals of trade & internal economic relation.
Books Prescribed
1. Shaikh Mahmud Ahmed. Economic of Islam, Mohammad Ashraf, Lahore.
1964, Chapter 2, 4, 6 and 7.
2. Nicolas, P.Achindes, Muhammedan Theories of Finance Premier Book House,
Lahore 1961. Part II.
3. Anwar Iqbal Qureshi, Islam and the theory of Interest, Muhammad Ashraf.
Lahore.
4. S.Abdul Latif. Basic of Islam Culture, Institute by Indo Middle East Studies,
Hydearbad (Deccan), 1965, II, chapter 12.
5. M.Yusufuddin, Islam kai Mo’ashi Nazaryat Hyderabad (Daccan) 2 volumes.
6. Abul Ala Maududi, sood, Islamic Publication Lahore.
7. Abul Ala Maududi, Islam and Jadeed mo’ashi Nazaryat,Islamic Publication
Lahore.
Books Recommended
1. Ihsan Muhammad Khan World Problems and Muslim Economics, Al-
Quran Printing and Publishing Association Ltd., Karachi, 1952.
2. Raihan Sharif, Islam Social Framework, Quetta Lahore.
3. Sh. Abdullah, Rivial of Zakat, Ripon Printing Press Lahore.
4. Abu Ala Maududi Economic Problems of man and their Islamic Solution, Islam
Publication Ltd., Lahore.
5. Abul Ala Maududi, Economic Teaching of the Quran. A history of Muslim
Philosophy, Pakistan Philosophical Congress, Otto Harresaowiz Wiesbaden,
1953, vol. I Chapter IX.
6. Abul Ala Maududi, Maslai Milkiyat-e-Zamin, Islamic Publications, Lahore.
7. Abu Yusuf, Islam ka Nizam-e-Mahasil. Tr. By Nijatullah siddiqui Chirag-e-
Rab, Karachi.
8. Nijatullah Siddiqui, Islam ka Falsafai Milkyat, Islamic Publications, Lahore.
9. Syed kutb, Islam ka Nizam-e-Adl, Tr. By Nijatullah Siddiqui, Islamic
Publications, Lahore, English translation Social Justice in Islam. American
council of Learned Societies, Washington 1953.
10. hifzur Rehman Sezbari, Islam ka Iqtisadi Nizam, Nadwatul Mussanifeen, delhi.
11. Relevant articles from Islamic culture, Hyderabad, Voice of Islam Karachi
Terjumanul Quran, Lahor Chiragh-e-Rah, Karachi and Islamic Review, London.
The Criterion Karachi.
12. Economic of islam Ibne Saud (Ma’Shiat-e-Islam)
13. Mashiyat-e-Islam (Abdul Ala Maududi)
14. Ghair Soodi Bainkari (Nijatullah Siddiqui)
M.A (FINAL)
There shall be five papers of 100 marks each of 3 hours duration
PAPER 1
MACRO-ECONOMICS1 Development of macro-economics, Micro economics vs. Macro-economics.
2 The Classical Macro-Economics:
Say’s law and Quantity—Wages, Prices Employment and Production—Savings,
Investment and the role of Interest. Wicks ell’s formulation and monetary and
fiscal policy.
3 The Keynesian Macro Economics :
Obstacles to full employment. Liquidity Preference significance. The Liquidity
Trap. Monitory Management and the role of Interest. The consumption function.
Short urn consumption behavior. Other influences on consumption spending.
Keynesian model and its application, comparison of Keynesian and classical
models.
4 Equilibrium :
Income Output and Employment—systems and effects of changes in price level.
5 Accelerations and Multiplier :
Working of acceleration, its efficiency effects and coefficient. Static and
dynamic mutisector multiplier, employment and foreign trade multipliers.
6 Growth and Fluctuation :
Growth, Investment and employment- stage nation or Exhilaration, Cyclical
fluctuation.
7 Employment Policy :
Changes in monetary and fiscal policies, Effect on investment, limitation and
alternative policies.
Coefficient static and dynamic maltisector multiplier, employment and foreign
trade multiplier.
Books Prescribed
Ackely : Macro-Economic Theory General.
Keyne Theory of Employment, Interest and money
Kuribara : Post-Keynesian Economics.
Mc’Dougal & Dernberg : Macro-Economics.
Hansen : Business Cycle and National Income.
Amrican Economic Association Surveys of Economic theory Vol II
Ruyal Economic Society.
Ellia (ed) A Survey of Contemporary
Holly (ed) Economics Vol II
Domar Essays in the Theory of Growth
Samuelson Foundation of Economic Analysis.
Macro Economic Readings
PAPER II
INTERNATIONAL ECONOMICSEvolution of International Trade theory from Ricardo to Haberler—
Measurement of cost to assess gain from trade,
1 Pure theory International Trade.
Supply: The derivation of the Transformation curve from the Production
Function. Factor-Price Equalization demand : The offer-curves and their
derivation from Trade Indifference curves. Consumption pattern and Trade.
Foreign Trade Multiplier.
Terms of Trade: Various concepts their role in measuring gain from trade
Factors affecting terms of trade of advanced and developing countries.
Trade and Welfare: Trade as instrument of welfare under multilateralism and
various restrictive variants. Trade and Economics Growth : Trade and Growth,
Growth and Trade. Different implication of these inter-relation ships for
specialized economics. Diversification of the economy for increased growth.
2 Balance of Payments: (Changes and their adjustment).
The balance of payments of statement. Elements in the adjustment process.
Elasticities and propensities of Trade. The working of the price and income
effect in the payment mechanism. Inter-relation between monetary and fical
policies and price income changes. Discriminatory trade and payment
restrictions and balance of paymentsadjustment. Concept of balance payments
in the short and long terms. Varation in payments discquilibria in Indistralised
and developing economy. Gold standared and the payments machahism.
3 Internation Investment and Foreign Aid:
Foregion Exchange: Market short term and long term Capital movement.
The transfer process .
Forigion Aid: Change in the concept. Terms and Volum of aidproblems
of donor & recipient countries. Absorption Capacity and flow of
funds.
4 Commercial Policy:
Trade restriction and the structure of world trade since the end of the First
World War. Tarrifs,Quotas, Commodity Agreements, State trading Exchange
control these restriction should be studied from the point of view of their impact
on the direction, composition and volume of the world trade and its effect on
the economic growth and welfare of various regions.
5 International Monetary Problems and Institutions:
Evolution of payment system is western Europe since World War II, payments
problem of the developing countries. Dollar storages. its changing character
causes and cure. The position of Dollar as reserve currency, its significance for
industrialized and under developed country. Sterling area: its changing role in
the postwar period I.M.F. World Bank. GATT and other international Economic
institutions.
6 Regional Economic Integration:
Ustom union issue from viner on words. Attitude of GATT. Regional Cooperation
in western Europe. Retional Integration and economic development.
Regional arrangement in developing areas, with special reference to R.C.D.
1 Basic Rending
C.P. Kindle Berger International Economic Richard D. Irwin
Incorporation IIIionis, 1963.
American Economic Reading in International Trade.
Association
Harry G. Johnson International Trade and Economic Growth.
J.E.Meade he Balance of Payment, Oxford University Press,
London.
Throp, W.L. Trade aid or what? John Hope Kings. University
Press, 1964
Mikesell, R.F. U.S. Private and Govt. Investment Abroad,
University of Oregon. Books 1962.
J.E. Meade Trade and Welfare, Oxford university Press,
London.
L.W. Towle International Trade and commercial policy, Harper
And Brothers.
Brain Tew International Monetary Cooperation, Hutchinson &
Co. Ltd.
S.E. Harris The Dollar crisis (New York Harcourt, Brace and
World Inc. 1961.
L. Tarshis Introduction to International Trade and Finance.
(New York John Willy & Sons Inc).
Bela Balasia The Theory of Economic Integration, Homewood,
III, Richard D. Irwin Inc 1961.
2. Supplementary Readings
• Harbarier, A.C. Some evidence on the International price
Mechanism, Journal of Political Economy
December, 1957.
• MacDougall, D. The Doller Problem, A reappraisal Prinston
University Essay in International Finance, 1960
• M. F Miliken & Proposal, Key to united States
W. W. Rostow Foreign Policy (New York) : Harper and Bros.1957
• Vanek International Trade : Theory and Policy.
• E.S. Mason Controlling World Trade,
McGraw Hill Book.
• GATT International Trade. (Annual Publication).
• A. Issacs International Trade. Tariffs and Commercial
Policies (Richard D. Irwin Inc. Illinois).
• R. F. Mikesell Foreign Exchange in the Postwar World. The
Twentieth Century Fund, (New York.54).
• A. G. L. Day The Future of Starling (Oxford Univ.Press)
P. W. Bell The Sterling Area In the Postwar World,(London
O.U.P.1956)
• R.G Lipsey Theory of Customs Union; A. General Survey.
Economic Journal September 1960.
• I. Frank The European Common Market (New York.
Frederic A Praegel Inc.1961).
• R. Triffin Yold and Dollar Crisis (Yale University Press 1960)
• F.Machtup Palm for Reform of the International Monetory
System (Princeton University.1962)
• Richard E. Caves Economic structure and International Trade.
• E.S.Masoa Controlling World Trade, McGraw Hill Book.
PAPER lll
MONETARY ECONOMICS
1. Supply of Money:
(i) Definition of money.
(ii) Process of the Creation of money.
(iii) Institutional Determinants of supply of money.
Government, Commercial Bank, non Banks financial intermediates and
Central Bank.
2. Demand of Money:
(i) Classical view
(ii) Keynesian extensions
(iii) Recent extensions
(a) Chicago School
(b) Patinkin
(c) Gurley Shaw
3. Purchasing Power of Money
(i) The Quality Theory of Money
(ii) The Fundamental Equations
(iii) The conditions for stability
(iv) The theories of loflation and Defination.
4. Monetary Theory:
Integration of real sector with monetary variables
(i) Theory of Interest _ classical, non-classical, Keynesian, Recent contributions.
(ii) Theory of wages - classical, non-classical, Keynesian, Recent contributions.
(iii) Theory of Price - classical, non-classical, Keynesian, Recent contributions.
5. Monitory Policy: Objectives of Monitory Policy:
(i) Price stability
(ii) Fostering of radid growth in the economy
(iii) Generation of employment
(iv) Maintenance of balance in International payments.
6. Monetary Management: The mechanism and instruments of monetary
management.
(i) Mechanism of monitory management
(a) Interstates mechanism
(b) Availability doctrine,
(c) portfolio approach
(ii) Tools of monetary management:
(a) Rediscount Rate
(b) Open market operation
(c) Reserve requirements
(d) Selective credit controls
7. External Value of Money:
(a) Gold Standard
(b) Purchasing Power Parity Theory
(c) Balance of Payments Theory
8. International Liquidity:
(i) International Monetary Fund
(ii) International Bank of Reconstruction and Development
(iii) International Development Association
(vi) International Finance Corporation
(v) Need for an international currency
Monetary Management in Pakistan
Reading List
Chandler, L.V. Economic of Money and Banking
New York Harper and Row.(Latest Edition)
Whittlsey, C. R Money and Banking. Analysis and Policy,
London, Macmillan, 1963
Sapers, R. S Modern Banking. (Oxford Clarendon Press
1961).
De Kock, M. H Central Banking.(London) Staple, Press,
1961.
Friedman, M. Studies in the Quantity Theory of Money
(Chicago, University Press)
Keynes, J.M. The General Theory of Employment
Interest and Money.
Patinkin D. Money Interest and Prices: An Integration
Of Monetary and Value Theory, (Yew
York). Fordham University Press, 1966.
Friedman, M. A Program for Monetary stability (New
York. Fordham University Press, 1966).
Johnson, H.G. “Monetary Theory and Policy” American
Economic Review, June 1962.
Johnson, H.G Keynes General Theory after Twenty Five,
Years, ‘American Economic Review.
May 1951.
A. Schheim, J. Techniques of Monetary Control Baltimor
John Hopkins, 1961
Lendbeck, A A Study of Monetary Analysis, Uppsals,
Abmquistwechsell, 1962
Chandler, L. C Central Banking and Economic
Development : (Bombay University 1962)
Meenai, S.A Mony and Banking in Pakistan, (Allied
Book Corporation :1966)
PAPER IV
There are Five alternatives in this paper. Candidates have the option to take any one
of the following :
A. History of Economics Thought.
B. Economic of Labour.
C. Econometrics.
D. Development Economics.
E. Management Economics.
PAPER IV—A
HISTORY OF ISLAMIC THOUGHTA history of the following main schools of thought and main lines of development since
about 1700 till about 1960. Mercantilism : Classical Physiocrats; Historical Socialist and
Marginal Utility Schools: Marshal Ian Economics ; Growth of Welfare Economics.
Stockholm School and Monetary Theory; Neoclassical school and theory of imperfect
Competition and Consumer Behavior, Growth in the Theories of Business Cycles and
International Trade ; Monetary Theory up to 1936 ; The New Economics and J M,
Keynes.
Recommended Books
1. Monroe Early Economic Thought.
2. Heimann History of Economic Thought
3. Schumpeter History of Economic Analysis
4. E. Cannan A Review of Economic Thought
5. Eric Roll A History of Economic Thought
6. Gide & Rist History of Economic Thought
7. Hutchinson History of Economic Thought
8. Gray History of Economic Thought
9. Hanney History of Economic Thought
PAPER IV-B
ECONOMIC LABOUR
PART – 1
1 Introduction : Place and importance of labour in works of Smith Ricardo, Mathus,
Milli; Marx, Mashall. Webbs, Mitchell, Commands and Keyness. A general treatment of
labour in highly industrilised countries as compared to emerging nations. Trade Union
movement in U.K, U.S.A. and U.S.S.R.
2. Employment Problems : The nature and basis of labour problems of insecurity.
Difination of unemployment. Disguised unemployment and methods of its measurement.
3. Theory of Labour Commitments :
PART –II
1. LABOUR PROBLEMS OF PAKISTAN
Labour Legislation : Review of Pre-1947 Labour Laws.
Labour Laws after 1967 to date. Some important existing Labour Laws viz. Aet,
regarding worker’s association, working conditions, wages, Industrial dispute and
labour management relation, social security and insurance and some other important
Central and provincial Acts. Amendments to Labour Laws—Adequacy of Labour
Laws--- implementation of Labour Laws—Labour Legislation and development-
Evolution of Labour Policy.
2. Labour Market: Study of the demand for Labour, Industrial Location Requirement
system, training of labour force and occupational analysis—Contract Labour Non
Agricultural skilled labour requirements. Supply of labour characteristics of Industrial
labour force, mobility of labour and commitment and examination of backward
bending supply curves. Lewis model of untimited labour supply and economic
development.
3. Wage Price Analysis : Determination of wages, Payment of wages—wage rate
differential—Dearness allow once, its effect on prices,employmentand productivity
Price trend, cost of living , real wages labour—welfare provisions.
4. Labour Organization: Short history of labour movement, Growth of Trade Unions
after 1957—Size, geographical location, significance—the bipartits tripartite bodies,
the structure of unions—political invovlment—I,L.O, and Pakistan—objectives of
union as an institution—Trade Unions and Economic Development.
Books Prescribed
1. Lester Economic of Labour, McMillian & Co,
New York 1958.
2. Dunlop. J.T Industrial Relations System Heary Holt &
Co, New York 1958.
3. Galenson, W. Labour in Developing Economics.
University of California Press, Berkely and
Les Angeles 1962.
4. Kerr.C.,Harbison Industrialism and Industrial Man, Oxford
F.H. Dunlop University Press, New York 1964.
J.T. and Myers, C.A.
5. Moor, W.E Labour Commitment and Social. Change in
developing Areas.
6. Feldman, A.F Social Sciences Research Council New
York, 1960.
PAPER IV—C
ECONOMICTRICS1. Introduction to the Theory of Economics, an outline of procedure and main
discoveries.
2. Elements of matrix algebra, Matrices, determinates vicars and vectors differentiation,
characteristic roots and vectors.
3. Error in variables.
The two-variable linear case
The classical approach
Prediction Problems.
Grouping of observations.
Use of Instrumental variables.
4. Auto-Correlation.
The two variable case.
Conquences of auto-correlated disturbances
Generalized Least squares
Estimation method
Prediction Problems
Multicollinarity
Hetro-scedasticity.
Legged variables, Dummy Variables
5. Simultaneous-Equation Problems
Simultaneous-Equation Problem
Identification
Limited Information Sign Equation (LISE)
Least Variance Ratio (LVR)
Two stage least squares
K-class Estimator
Tests of Identifying Restrictions
Full information Maximum Likelihood (FIML)
Tree stage least squares.
6. Technical Economic Relations.
Micro-Economic Cost Curves.
Technical Development.
7. Econometric Model.
The descriptions of Complete Systems.
The Movements of Complete Systems.
The purpose and logic of economic policy.
Books Prescribed
1. Klein L.R A Text Book of Econometrics.
2. Tinter Econometrics Method.
3. Hood and Koopmans Studies in Economic
4. Allen, R.G.D Mathematical Economic
5. Blyth. C.A. The Use of Economics
6. Tinbergen One the Theory of Economics Policy.
PAPER IV—D
DEVELOPMENT ECONOMICS
1. Concept of Growth & Development—Basic terminology
2. (a) A general framework of analysis:
(b) Main constituent of growth
3. Statement and appraisals of theories of growth and Development.
Smith.
Richardo.
Marx
Schempeter.
Lewis.
Nurkse.
Rosentein-Rodan
Hirschman.
Harrod-Domar Model and its Variants
4. Project Appraisal.
(a) Criteria of project evaluation.
(b) Project evaluation of Development.
5. Issue in Development Planning.
(a) Role of fiscal and monitory policy.
(b) Role of Agriculture.
(c) Role of foreign Trade
(d) Role of Foreign Aid
(e) Role of Social Overheads
(f) Population Growth
(g) Role of Public and Private Sector and its balancing.
Reading List
Adelman, Irma Theories of Economic Growth and
Development, Stanford,1986
Bicanic, Rudolf “Economic Growth, Development and
Planning in Socialist Countries” in fast
Nelson (Ed) Economics Growth Rational
Problems, Cases, University of Texas
Press,1960 pp. 171—190
Galbraith, John K. “Positive Approach to economic Aid”
Foreign Affairs,39 (April 1961 pp. 444,
457.
Haq. M. The Strategy of Economic Planning.
Oxford Press.
Higgins, B. H. Economic Development Problems
Principles and Policies. New York,
Norton.1959
Hirchman, A. O. The strategy of economic Development
,Yale.
Nichols W. H “The Place of Agriculture in Economic
Development,” In Keneth E. Berril (ed)
Economic Development with special
Reference to East-London 1964, pp.
33—371.
Nurkes Problems of Capital Formation in
Underdeveloped countries New York,
1963
Ranis. G “A theory of Economic Development”
American Economic Review, 51 (Sept.
1961. pp. 533—465).
“Innovation, Capital accumulation, and
Economic Development,, American,
Economic Review, 53 June 1965 pp.
21—313.
Rosestein-Rodan “Notes on the Theory of the Big Push”
in H. E. Ellis (ed). Economic
Development for Latin.
Rostow Some Lessons in Economic
Development USIS Karachi 1964.
Ses, A.K “Soma Notes on the Choice of Capital
Intensity in Development Planning. The
Q.J.E 71 (Nov.1957).pp. 561—584
Schumpeter, J. A “The Journal of Economic
History(1948). Supplement VII.
Tinbergen, J. “The Optimum Rate of Saving ”The
Economic Journal 66. Dec(1956) pp.
603—609.
Walkinsly L.J. The Planning and Execution of
Economic development. New York 1963
Appendix 8.
Wilcix, Clair “Pakistan” in Everest E.. Hagen(ed)
Planning Economic Development Home
Wood (III)1963, pp.52—79
E.A.G. Robinson Problems in Economic Development.
London 1965. (ed).
UN, ECAFE Economic Development and Planning in
Asia and the Far East-Social aspect
Economic Bulletin fdr Asla & the Far
East (Bangkok) Vol. 10 No. 3. 1959
Berner, Y.S. Theories of Economic ,Development and
Growth,
Meir. Gerald M. Lending Issues in Development
Economics. Oxford University Press,
New York,1964.
Brution, Henry J. Principles of Development Economics
Hesly The Economics of Aid.
PAPER IV--E
MANAGEMEENT ECONOMICSPART I
1. A Unified Concept of Management.
Planning Organization, Co-ordination. Motivation Control.
2. The Organizational hierarchy.
The Board of Directors. The Chief Executive. The Supervisor.
3. Departmentation.
Basic Departmentation. The Assignment of Activities.
4. Staff and Line Relationship.
5. Centralization and De-centralization.
6. Problems of Management.
PART II
1. Pricing Strategy
Opportunities for multiple products. Policy on adding new products. Policy on
dropping old products.
2. Pricing Strategy.
Pricing products of lasting disincentiveness. Pricing products. Of perishable
disincentiveness. Pricing standard products when Competitions are few of Cost—Plus
Pricing Cyclical, Pricing product line pricing.
3. Promotional Strategy.
The economic of Advertising. Method for determining total Advertising Budget.
Cyclical fluctuation of Advertising. Measuring economic effects of Advertising.
4. Introduction to Operational Research and Managements.
Linear Programming Quavering Theory Critical Path Scheduling and P.E.R.T.
Theory of games Dynamic Programming and Replacement. Policy Ranking
Techniques Simulation.
1. Problems of Management in Under developed countries :
2. Project Evolution : Public investment Private Investment.
3. Business Structure and Management Method in Pakistan.
BOOKS PRISCRIBED
(PART - I)
(i) Harold Koontz & Principles of Management (mc-Graw-Hill
Cycil O’Donnel Book Co. New York 1968.
(ii) Elmore Peterson Grosner Plowman Business Organization and Management
& J. M Triket (Richard D. Irwin Inc. New York 1962)
(iii)L. A Allen Management and Organization (Mc-Graw
Hill. New York 1958)
(iv) Hodges Management.
(For Chapter six)
PRISCRIBED BOOKS
(Part -II)
(i) Jeel Deam Managerial Economics Practice Hall Inc.
1958. New York.
(ii) M. J. Sargeaunt Operational Research for Management
(Heineman Ltd.1965. London)
*Principles of taxation and specific taxes.
Public Debt.
Fiscal Policy.
Paper V
E S S A YThe paper shall comprise all the subject taught as compulsory & optional papers at
the M.A economic examination in the university of Karachi..

MANAGEMENT BY OBJECTIVES

The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed.

The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to

be followed by them, they are more likely to fulfill their responsibilities.

THE MBO PROCESS




UNIQUE FEATURES AND ADVANTAGES OF MBO

The principle behind Management by Objectives (MBO) is to create empowered employees who have clarity of the roles and responsibilities expected from them, understand their objectives to be achieved and thus help in the achievement of organizational as well as personal goals.

Some of the important features and advantages of MBO are:


■Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are:

Specific
Measurable
Achievable
Realistic, and
Time bound.

The goals thus set are clear, motivating and there is a linkage between organizational goals and performance targets of the employees.



■The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.



■Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.



■Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.

ACCOUNTING DEFINITIONS PART 5

IMPORTANT AND USEFUL MATERIAL AVAILABLE AT COST-ACCOUNTANTS
http://finance.groups.yahoo.com/group/cost-accountants/
MAIN CATEGORIES ARE:
MANAGEMENT ACCOUNTING, ACCOUNTING INFORMATION SYSTEM, ACCOUNTS RECEIVABLE, AUDIT, IFRS & IAS, DICTIONARIES, AUDITING STANDARDS AND MUCH MUCH MORE.




EA is Enrolled Agent (IRS designation).

E&O INSURANCE is an errors and omissions, or E&O, liability policy (often called malpractice insurance) covers liability for negligent acts, errors and omissions committed by professionals, including physicians, accountants, lawyers, etc.

E&OE is a British acronym that stands for "Errors and Omissions Excepted". E&OE is a legal disclaimer that notifies the reader that, without prejudice, that the content and/or validity of the subject data may change without notice.

E&P is Earnings and Profits.

EARNED INCOME is that income realized by the provisioning of goods and services.

EARNED SURPLUS see RETAINED EARNINGS.

EARNING ASSET is an asset which provides income (e,g, rental property).

EARNING CAPACITY is the net average earnings at a given moment in time: past, current or future.

EARNING CAPACITY, LOSS OF “Loss of earning capacity” means the difference between the worker’s net average earnings before the incident, and the net average amount of wages the deciding body determines the worker is capable of earning after the incident.

EARNING POWER is earnings before interest and taxes (EBIT) divided by total assets.

EARNING QUALITY is best determined through the inverse relationship between the amount of time elapsed between revenue recognition and cash collection.

EARNINGS is a term that refers to the financial capacity of a corporation to make distributions to shareholders other than return of capital, e.g., dividends. See also RETAINED EARNINGS.

EARNINGS BEFORE TAXES see PROFIT BEFORE TAXES.

EARNINGS FROM OPERATIONS (EFO) represent earnings before other operating items less (i) depreciation and amortization plus (ii) other income less (iii) other expense.

EARNINGS MANAGEMENT occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting numbers.

EARNINGS PER SHARE (EPS) is either: a. Basic EPS is earnings before extraordinary gains and losses, less preferred-share dividends, divided by all common shares outstanding at the most recent fiscal year end. Net income, or earnings, refers to the company's after-tax profits before extraordinary gains or extraordinary losses for the most recent annual period; or, b. Diluted EPS is where the number of shares used in the calculation is increased to account for outstanding dilution such as options, warrants, in-the-money convertibles, etc.

EARNINGS RETENTION is the proportion of net income that is not paid in dividends. A firm earning $80 million after taxes and paying dividends of $20 million has a retention rate of $60 million/$80 million, or 75%. A high retention rate makes it more likely a firm's income and dividends will grow in future years.

EBIT is Earnings Before Interest and Tax. EBIT is an indicator of a company's financial performance calculated as revenue less expenses excluding tax and interest. It is sometimes referred to as operating earnings.

EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortization, but after all product / service, sales and overhead (SG&A) costs are accounted for. Sometimes referred to as Operational Cash Flow.

EBITDARM is an acronym for Earnings Before Interest, Taxes, Depreciation, Amortization, Rent and Management fees.

E.C. (EUROPEAN COMMUNITY or EUROPEAN COMMON MARKET) is a trading block of countries in Europe that have agreed on common regulations on cross-border trade.

ECONOMETRICS literally means 'economic measurement'. It is the branch of economics that applies statistical methods to the empirical study of economic theories and relationships. It is a combination of mathematical economics, statistics, economic statistics and economic theory.

ECONOMICALLY FEASIBLE means that the benefit of tracing the cost (greater accuracy) outweighs the cost of doing so.

ECONOMIC BOOK VALUE allows for a book value analysis that adjusts the assets to their market value. This valuation allows valuation of goodwill, real estate, inventories and other assets at their market value.

ECONOMIC COST is a synonym for opportunity cost, i.e. the highest valued alternative given up in the pursuit of an activity. See ACCOUNTING COST and OPPORTUNITY COST.

ECONOMIC DEPRECIATION is the decline in real estate property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC ENTITY accounting concept that provides context or “point of view” for the economic events (i.e., transactions) captured by the financial statements. In short, it answers the questions, “Whose asset is it?”; “Whose liability is it?”

ECONOMIC EVENT is the transfer of control of an economic resource from one party to another party.

ECONOMIC EXPOSURE, in foreign exchange, is the extent to which the value of the firm, as measured by the present value of all expected future cash flows, will change when exchange rates change.

ECONOMIC INCOME is the maximum amount that can be distributed to owners during the accounting period and leave the business as well off at the end of the accounting period as it was at the beginning of the period; i.e. cash flow based.

ECONOMIC ORDER QUANTITY is the order quantity that minimizes total inventory costs. A total inventory cost is the sum of ordering, carrying and stock-out costs.

ECONOMIC PROFITS is the difference between the total revenue and the total opportunity costs.

ECONOMIC RESOURCES is the profitable extraction or production, under defined investment assumptions, of returns that are analytically demonstrable or can be assumed with reasonable certainty.

ECONOMIC SUBSTANCE refers to the application of income tax laws, i.e., the substance of the transaction, rather than its form, determines the tax consequences, with few exceptions. The "form" of a transaction is only the label the interested parties attach to their arrangement. For instance, an arrangement might be called a compensation agreement, loan, lease or sale. Documents may support the form, but the courts are not concerned with these labels or papers that purport to govern the transaction -- they focus on its substance. The "substance over form" analysis is used to dissect self-serving transactions between parties, including loans and payments to family members; transactions between related corporations and their shareholders, partnerships and their partners; and between trusts and their beneficiaries. For instance, sale of a home by a parent to a child may be recharacterized by the court as a gift, if the child never pays for it. Related-party transactions provide fertile territory for self-dealing, with the tax benefit as the real motivating purpose, disguised by the form of the transaction. In contrast, arm's-length transactions with independent third parties are far less vulnerable.

ECONOMIC VALUE (EV) is the value of an asset deriving from its ability to generate income.

ECONOMIC VALUE ADDED (EVA) measures the difference between the return on a companies capital and the cost of that capital. A positive EVA indicates that value has been created for shareholders; a negative EVA signifies value destruction.

ECONOMIES OF SCALE is based upon the theory that the more you produce of a good, the less that it costs for each additional unit, i.e., efficiency. Specifically, it is the reduction of the costs of production of goods due to increasing the size of the producing entity and the share of the total market for the good/product.

EDP is Electronic Data Processing.

EEO is Equal Employment Opportunity or Equal Employment Office.

EF&L is Errors, Fines and Losses.

EFFECTIVE DATE OF INTEREST is the market rate at time of a debt issue.

EFFECTIVE INTEREST RATE is the cost of credit on a yearly basis expressed as a percentage. Includes up-front costs paid to obtain the loan, and is, therefore, usually a higher amount than the interest rate stipulated in the note.

EFFECTIVE TAX RATE is the net rate a taxpayer pays on income that includes all forms of taxes. It is calculated by dividing the total tax paid by taxable income.

EFFICIENCY is the ratio of the output to the input of any system.

EFFICIENT MARKET THEORY is the hypothesis that market prices reflect the knowledge and expectations of all investors. Within this theory, investors who adhere to it believe it to be highly improbable that market movement can be predicted, i.e., using darts to chose stocks are just as effective as stock or market analysis.

EFFORT-EXPENDED METHOD measures the percentage of labor hours incurred to date as compared to estimated total labor hours for each contract.

EFO see EARNINGS FROM OPERATIONS.

EFT see Electronic Funds Transfer.

EI&DO is Extraordinary Items and Discontinued Operations.

EITF see Emerging Issues Task Force.

ELECTRONIC FUNDS TRANSFER is a payment executed through computers.

ELEMENTARY ACCOUNTING is the basics in financial accounting theory and practice.

ELIMINATION is the the act of removing a mathematical quantity by combining equations. This is common practice in accounting when consolidating financial reports; one example would be inter-company transactions, currency translations, and account balances.

EMBEZZLEMENT is the fraudulent appropriation and personal use of funds or property entrusted to that persons care but actually owned by someone else, e.g. an employee can embezzle money from his or her employer, a civil servant can embezzle funds from the treasury, or a pastor can embezzle funds from a church. See also THEFT and WHITE COLLAR CRIME.

EMC (EXPORT MANAGEMENT COMPANY) is a private company that serves as the export agent for manufacturers, being paid by commission or retainer. Merchandise is not normally purchased by the EMC.

EMERGING ISSUES TASK FORCE (EITF) was formed in 1984 in response to the recommendations of the FASB's task force on timely financial reporting guidance and an FASB Invitation to Comment on those recommendations. The mission of the EITF is to assist the FASB in improving financial reporting through the timely identification, discussion, and resolution of financial accounting issues within the framework of existing authoritative literature.

EMI is Equal Monthly Installments (finance/business).

EMPLOYED, generally, is having your services engaged for; or having a job especially one that pays wages or a salary. In a more specific sense employed means: to put to use, e.g. funds employed or ideas employed.

EMPLOYEE BENEFITS is non-wage compensation provided to employees, such as group insurance, retirement benefits, day care, tuition reimbursement, and specialized benefits.

EMPLOYEE COMPENSATION is wage and salary payments as well as benefits including health and life insurance, retirement payments, and any other non-cash compensation.

ENCUMBERED is when an asset is owned by one party subject to the legal claims of another party. One example is a homeowner that owns a home that is subject to (encumbered by) the claims of the mortgage holder.

ENCUMBRANCE is a) a right or interest in land owned by someone other than the owner of the land itself; examples include easements, leases, mortgages, and restrictive covenants; or, b) in accounting, an encumbrance is an anticipated expenditure, or funds restricted for anticipated expenditures, such as for outstanding purchase orders.

ENDING INVENTORY is inventory at the end of the accounting period.

ENDORSE, depending upon usage, can be: a. application of legal signature to documents or checks; b. a guarantee as meeting a certain standard; c. to be behind or approve of; or, d. to give active support or one's approval to.

ENDORSEMENT, dependent upon usage, can be: a. a signature that validates something, e.g. a bank cashier will not cash a check without an endorsement; b. a promotional statement, e.g. as found on the dust jackets of books; or, c. formal and explicit approval.

ENDOWMENT is a permanent fund where gifts to the fund are held in perpetuity and where earnings are used in accordance with the donor’s specified wishes.

ENGAGEMENT is a binding, pledging, or coming together, e.g. a mutual pact, contract, or agreement.

ENGAGEMENT LETTER is a document that defines the legal relationship (or engagement) between a professional firm e.g., law, investment banking, consulting, advisory or accountancy firm and its client(s).

ENGINEERED COSTS are those costs having a clear linkage to output, e.g., direct materials costs.

ENHANCED DISCLOSURE, in securities, is an in-depth open disclosure of any activity taken or proposed by the securities issuer that may have any relevance, positive or negative, to the securities in question.

ENROLLED AGENT is any individual who is enrolled under the provisions of Treasury Department Circular No. 230 to practice before the IRS.

ENTERPRISE is an organization created for business ventures.

ENTERPRISE RESOURCE PLANNING (ERP) is an information system or process that integrates all operational data and related applications for an entire enterprise. ERP systems permit organizations to manage resources across the enterprise.

ENTERPRISE VALUE (EV) is a measure of a company's value. Enterprise value is calculated by: market capitalization plus debt and preferred shares minus cash and cash equivalents. In effect, enterprise value is the theoretical takeover price, i.e., in the event of a buyout an acquirer would have to take on the company's debt but would pocket its cash.

ENTERPRISE ZONE is a depressed neighborhood, usually in an urban area, where businesses are given tax incentives and are not subject to some government regulations. These advantages are designed to attract new business in the zone.

ENTITY, in business, is a separate or self-contained existence that provides goods or services.

ENTITY BOUNDARY is that which is legally included within or excluded from a defined entity.

ENTITY ASSUMPTION is the assumption that financial statements are prepared for an entity that is separate and distinct from its owners.

ENTITY CONCEPT is the concept that financial accounting and reporting relates only to the activities of a specific business entity and not to the activities of the owners of that entity.

ENTITY THEORY is where a legal entity is regarded as having a separate existence from the owners. The financial statements are prepared from the perspective of the entity, not its owners. See PROPRIETARY THEORY.

ENTREPRENEUR is the person who assumes the financial risk of the initiation, operation and management of a given business or undertaking. He/She is primarily a financial and/or professional risk taker almost to the extreme.

EOM is End of Month.

EOY is End Of Year.

EOZ is Environmental Opportunity Zones.

EPS see EARNINGS PER SHARE.

EPU see EQUIVALENT UNIT OF PRODUCTION.

EQUILIBRIUM POINT is one of the fundamental concepts in economics describing the market price of a good or service as being determined by the quantity of both supply and demand for it. In 1890, the English economist Alfred Marshall published his famous work, Principles of Economics. Marshall's graph displays two lines that cross as an "X" with the declining line representing customer demand and the ascending line supply. The intersection of the two lines denotes an EQUILIBRIUM POINT toward which the market price will move to equalize the supply quantity to exactly match the demand quantity. Any higher price above this equilibrium creates a surplus where sellers would inevitably lower their price to sell more of the product. A lower price creates a shortage where sellers would increase price to earn more profit.

EQUIPMENT is generally determined by the meeting of three tests: a. Has an acquisition cost that is equal to or more than the cost hurdle for classifying capitalized assets. Includes: Invoice amount, sales tax, freight costs, installation costs, costs for the initial complement of supplies needed to place the asset into service, accessory and auxiliary apparatus necessary to make it usable for the purpose for which it was acquired; less trade or trade in discounts and/or educational allowances Excludes: Federal Excise tax, duty, insurance, maintenance and warranty costs; and, b. Has a useful life of two or more years If the item will not have a useful life of more than two years it is considered expendable material, even if it costs more than the level for determining a capital asset; and, c. Is a stand alone item. The item is not permanently attached to or integrated into a building or structure.

EQUIPMENT LOAN is a loan used for the purchase of capital equipment.

EQUITY is, normally, ownership or percentage of ownership in a company or items of value.

EQUITY ACCOUNTING is the practice of showing in a company's accounts the share of undistributed profits of another company in which it holds equity ownership (usually below 50%). The share of profit shown is usually equal to its share of the equity in the other company. The profit may not actually be paid over, but the equity holding company has a right to this share of the undistributed profit.

EQUITY CAPITAL is a form of financing where equity in a business is sold to private investors.

EQUITY FINANCING is a method of an entity obtaining funds by issuing either common or preferred stock, or both. Receipts can be through cash, services, or property. It is in the entities best interest to issue shares when the market price for the stock is at its highest.

EQUITY FUND is a mutual fund whose portfolio consists primarily of common stocks.

EQUITY FUNDING see EQUITY CAPITAL.

EQUITY HOLDING is a holding of the nominal share capital in a company where the shareholding entitles the shareholder to a right to votes, to profits available for distribution to shareholders and to assets available for distribution on a winding up of that company. A holding of shares held as trading stock for the purpose of a trade does not constitute a participating holding.

EQUITY INSTRUMENT covers any share (or part thereof) in the equity share capital of a company (or a comparable member’s interest in a close corporation). The term also includes share options and any other financial instrument convertible into a share (such as a convertible debenture).

EQUITY METHOD is a method of accounting for investments in associated companies.

EQUITY MULTIPLIER (EM) shows the amount of assets owned by the firm for each equivalent monetary unit owner claims held by stockholders, i.e., the equity multiplier measures how many dollars of assets an institution supports with each dollar of capital. If a firm is totally financed by equity, the equity multiplier will equal 1.00, while the larger the number the more highly leveraged is the firm. EM compares assets with equity: large values indicate a large amount of debt financing relative to equity. EM, thus, measures financial leverage and represents both profit and risk measurement. EM affects a firm’s profit because it has a multiplier impact on Return on Assets (ROA) to determine the firm’s Return on Equity (ROE). EM is also a risk measure because it reflects how many assets can go into default before a company becomes insolvent. The EM ratio is best compared to industry averages. Formula: Total Assets / Net Worth

EQUITY SHARE is a. a share or class of shares whether or not the share carries voting rights, b. any warrants, options or rights entitling their holders to purchase or acquire the shares referred to under (a), or c. other prescribed securities. An equity share is a perpetual liability because it signifies an owner's legal demand upon the assets of the entity in which the equity share if held. See also COMMON STOCK.

EQUITY SHARE CAPITAL is capital raised by an entity through the sale of common shares.

EQUITY OFFERING see EQUITY CAPITAL.

EQUITY-TO-ASSET RATIO expresses the proportion of total assets financed by the owner’s equity capital. It is the reciprocal of the debt-to-asset ratio.

EQUIVALENT UNIT OF PRODUCTION (EPU) is based on the idea that if 100 units are all 40% complete, then 40 whole units could have been completed.

ERISA, in the U.S., refers to the Employee Retirement Income Security Act of 1974. ERISA is a major U.S. law which guarantees certain categories of employees a pension after some period at their employer; there had been more ambiguity before about what rules an employer could put on which employees could get a pension.

ERP can mean either Enterprise Resource Planning or Early Retirement Program. See ENTERPRISE RESOURCE PLANNING.

ERROR OF COMISSION is an error that occurs as a result of an action taken. In accounting, the error occurs when one or both of the double entries are made in the correct class of account but the wrong account within that class.

ERROR OF OMISSION is an error which occurs as a result of an action not taken. In accounting, the error occurs when both the entries required for a transaction are completely omitted from the books.

ERROR OF ORIGINAL ENTRY, in accounting, occurs when the double entry is made but using an incorrect figure.

ERROR OF PRINCIPLE, in accounting, occurs when one or both of the entries are made in the wrong class or category of account.

ESCHEAT is the reversion of property to the state (government) in the absence of legal heirs or claimants.

ESCROW ACCOUNT see TRUST ACCOUNT.

ESTATE is the entire group of assets owned by an individual at the time of his or her death. The estate includes all funds, personal effects, interests in business enterprises, titles to property-real estate and chattels, and evidences of ownership such as stocks, bonds and mortgages owned, notes receivable, etc. All claims against an estate must be duly filed with the Executor or Administrator of the estate, and approved by the court of law under which the will is being probated or the line of heritage is being determined before the indebtedness may be satisfied.

ESTATE TAXES are the Federal taxes levied on the transfer of property from the deceased to his or her heirs, legatees or devisees.

ETC (EXPORT TRADING COMPANY) is a private company that usually purchases items from domestic manufacturers, then sells them to foreign markets. The difference between an EMC and an ETC is sometimes insignificant, i.e., an EMC may occasionally take title of goods, while an ETC may sometimes work strictly on commission without purchasing the goods. The difference is what the company normally does.

ETHICAL STANDARDS, in accounting, is a written document containing basic principles and essential procedures together with related guidance in the form of explanatory and other material.

ETHICS, in business, are moral and professional principles.

EUROBOND see GLOBAL BOND.

EUROIZATION is the use of the euro by a country as its own currency; the linking of a currency’s value to that of the euro; or, the use of the euro for accounting purposes.

EV (economic value) is the value of an asset deriving from its ability to generate income.

EVA see ECONOMIC VALUE ADDED.

EVENT RISK is the risk that the ability of an issuer to make interest and principal payments will change because of rare, discontinuous, and very large, unanticipated changes in the market environment such as (1) a natural or industrial accident or some regulatory change or (2) a takeover or corporate restructuring.

EX is not including or without, e.g. a stock price ex dividend. In business: free of any transport or handling charges incurred before removal from a given location, e.g., bought the goods ex warehouse.

EXCEPTIONAL COST see EXCEPTIONAL ITEMS.

EXCEPTIONAL ITEMS are material items which derive from events or transactions that fall within the ordinary activities of the reporting entity and which individually or, if of a similar type, in aggregate, need to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view.

EXCESS OF REVENUE OVER EXPENSES in the not-for-profit sector. There is a common misconception that not-for-profit organizations are not allowed to have a financial cushion as they are “not-for-profit”. In this context it is useful to remember that not-for-profit organizations are also “not-for-loss” organizations. An organization cannot sustain losses over the long term without ceasing to operate or going bankrupt. Excess of revenue over expenses is the planned financial position that there will always be a sufficient amount of funds on hand to continue to run the not-for-profit entity for some period without additional funding; usually 3-4 months.

EXCHANGE is a. a workplace for buying and selling; open only to members, e.g. New York Stock Exchange; or, b. reciprocal transfer of equivalent sums of money especially the currencies of different countries, e.g. foreign exchange markets.

EXCHANGE GAIN (LOSS) is a gain (loss) on the exchange of one currency for another due to appreciation (depreciation) in the home currency (for receivables).

EXCHANGE LOSS (GAIN) see EXCHANGE GAIN (LOSS).

EXCHANGE RATE is the rate at which one currency can be traded for another.

EXCHANGE RATE RISK, in foreign exchange, is the variability of a firm’s value due to uncertain changes in the rate of exchange.

EXCISE TAX is a tax imposed by federal, state, and local governments on an act, occupation, privilege, manufacture, sale, or consumption that is not deductible (e.g., tobacco, gasoline and spirits). This term is in increasing usage to describe almost every tax other than income tax and property tax.

EXECUTOR is a legal entity, frequently an individual, known before death to a testator, who is named in the testator's will to carry out the desires of the deceased after his death as designated in the will. Executors must be approved by the court of law probating the will. An executor pays all indebtedness as claimed by creditors of the estate, with the approval of the court of law, and then carries out or executes the will according to the terms set forth by the testator.

EXEMPT is being freed from or not subject to an obligation, liability, tax, etc.; excused. Examples: exempt gifts or tax-exempt bonus.

EXERCISE, in business or law, to make use of a right available in a legally binding agreement, e.g. to implement the right of the holder of an option to buy (in the case of a call) or sell (in the case of a put) the underlying security.

EX-FACTORY is where a seller's responsibility ends when the buyer at point of origin, i.e., factory, accepts merchandise. This can also be written as Ex-Warehouse, Ex-works, etc.

EXISTING USE VALUE (EUV) is the price at which a property can be sold on the open market assuming that it can only be used for the existing use for the foreseeable future.

EXPECTATION GAP, in accounting, is the gap between an auditors' actual standard of performance and the more rigorous public expectation of what an auditors' performance should be. The users of financial statements should be allowed to expect that the auditors' materiality levels correspond with their own. If this is not the case an expectation gap will arise. Especially if the financial statements contain non-corrected known errors or omissions classified as immaterial by the auditor, but classified as material by the users. The unknown material errors and omissions are still a part of the audit risk.

EXPECTED ANNUAL CAPACITY is the planned activity levels or output for a given year taking into account efficiency and idle capacity.

EXPECTED VALUE OF PERFECT INFORMATION (EVPI) is the difference between the expected value with (additional) perfect information and the expected value with current information. The expected value of perfect information is the maximum amount a decision maker should pay for additional information that gives a perfect signal as to the state of nature.

EXPENDABLE is something that can be used and discarded without hurting the end product or the company's viability.

EXPENDABLE NET ASSETS are those assets not required to be retained in perpetuity, i.e. those assets available for use for operations.

EXPENDABLE TRUST FUND is a governmental fiduciary fund held in a trustee capacity by a governmental agency that accounts for assets and activities restricted to a specific purpose in accordance to formal intent. The principal of the fund can be expended towards only the activity specified, e.g., Unemployment Compensation Fund, Employee Benefits Fund, etc.

EXPENDITURE is a cost incurred in the normal course of business to generate revenues. See expenses.

EXPENSE is the amount of assets or services used during a period.

EXPENSES are the daily costs incurred in running and maintaining a business. See expenditure.

EXPIRATION DATE is the date on which something; e.g. a security or bond offering, warranty or license; is no longer valid or in effect.

EXPIRED EXPENSE is an expense having come to an end or become void after passage of a period of time.

EXPLORATORY RESEARCH is a method used when gathering primary information for a market survey where targeted consumers / customers are asked very general questions geared toward eliciting a lengthy answer.

EXPORT BROKER is an entity that brings together foreign buyers with domestic manufacturers for a fee, generally providing little other services. An EMC, who is also a middleman, often provides extensive services to complete the transaction as well.

EXPORT DECLARATION is the official paperwork required of exporters so trade transactions and goods can be tracked.

EXPORT LICENSE is the governmentally issued legal permit to export merchandise. In the U.S., it is either a general license requiring no additional paperwork or a validated license for certain federally controlled items.

EXPOSURE, generally, is the extent to which a product is kept in the public eye through the press, radio, television, and public appearances. In finance, exposure refers to the amount that a business or person can lose. For example: in foreign exchange, it refers to the degree to which a company is affected by exchange rate changes.

EXPOSURE DRAFT is a proposed statement of financial accounting standards issued by the FASB for public comment. The exposure draft represents the FASB's considered judgment on a specific accounting issue. Subject to comments received and possible additional deliberation, an exposure draft may become a Statement of Position (SOP), mandating a Financial Accounting Standard (FAS).

EXPROPRIATION is the taking of property or rights by governmental authority such as eminent domain, possibly including an emergency situation, such as taking a person's truck or bulldozer to build a levee during a flood. In such a case just compensation eventually must be paid to the owner, who can make a claim against the taker.

EXTERNAL is from or between other countries, e.g. external commerce; or, happening, arising or located outside or beyond a company, e.g. external influences.

EXTERNAL AUDIT is an audit conducted by an individual or firm that is independent of the company being audited. These independent auditors audit the books of a company generally once per year (see INTERIM AUDIT) after the completion of the company's fiscal year. Their role is to give an opinion of the financials statement's reflection of the status and operations of the company being audited. Based on what they witness during the audit they will also produce, for management and board utilization, a management letter. Although a financial statement audit is the most common type of external audit, external auditors may also conduct special purpose audits which might include; performing specific tests and procedures and reporting on the results, a less intensive review, and compilations.

EXTERNAL AUDITOR is an auditor, usually working for an audit firm, that is completely independent of the company it is auditing. External auditors should always be certified by a professional association of accountants, and should be selected by, and report to, the corporation’s board of directors.

EXTERNAL DEBT is the total private and public debt owed by a country to individuals, households, firms, and governments in other countries.

EXTERNAL ENVIRONMENT is factors (conditions, trends, and forces) essentially outside the control of organizational members. External environmental scans are conducted to identify important factors in the external environment. This analysis is often a critical aspect in all business or strategic plans.

EXTINGUISHMENT OF DEBT is the debtor's satisfaction of the obligation to a creditor, either legally or in-substance. A debt shall be accounted for as having been extinguished in a number of circumstances, including when it has been settled through repayment or replacement by another liability.

EXTRAORDINARY EXPENSE see EXTRAORDINARY ITEMS.

EXTRAORDINARY ITEMS are material items that are unusual in nature and occur infrequently. Both characteristics must exist for an item to be classified as an extraordinary item on the income statement.

EXTRATERRITORIAL INCOME EXCLUSION is the amount excluded from a taxpayer's gross income for certain transactions that generate foreign trading gross receipts. In general, foreign trading gross receipts include gross receipts from the sale, exchange, lease, rental, or other disposition of qualifying foreign trade property. Foreign trading gross receipts also include receipts from certain services provided in connection with such property, as well as engineering and architectural services for construction projects outside the United States. Qualifying foreign trade property generally includes property that is held primarily for sale or lease for direct use or consumption outside the United States. Form 8873 is attached to the taxpayer's income tax return. Both corporate and non-corporate taxpayers who have qualifying transactions may now be required to file Form 8873. The exclusion reported on Form 8873 was created by the Foreign Sales Corporation (FSC) Repeal and Extraterritorial Income Exclusion Act of 2000. The new exclusion applies to certain transactions entered into after September 30, 2000, but is subject to transition rules for foreign corporations with a valid FSC election in effect on September 30, 2000.

POL prices surge by 5pc to 9pc

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Sunday dropped the petrol bomb on inflation-stricken 170 million people of the country by increasing the petroleum products by 5 per cent to 9 per cent with massive increase in motor gasoline (petrol) by Rs 6.10, from Rs 65.11 to Rs 71.21 per litre, HOBC (High Octane Blending Component) by Rs 7.41, to Rs 86.84 from Rs 79.43 per litre, with immediate effect from today (Monday, February 1, 2010).

In its notification released late on Sunday night, the Ogra also increased the price of High Speed Diesel (HSD) by Rs 3.33 per litre to Rs 71.99 per litre from Rs 68.56, kerosene by 5 per cent from Rs 60.75 to Rs 64.07 per litre, Light Diesel Oil (LDO) by 5 per cent to Rs 61.07 from Rs 58.10 per litre.

The whopping increase would multiply economic miseries of the masses as the transportation cost of the goods would inflate manifold and, therefore, the inflation would surge. However, the increase in POL products would bring relief for the current regime, which is struggling a lot to increase its revenue generation to meet the target of Rs 1,396 billion as agreed with the International Monetary Fund (IMF), as the sales tax collection would increase.

The price increase of kerosene will inflict huge monetary losses to the people living in the far-flung areas, especially in the Northern Areas, where natural gas and even Liquefied Natural Gas (LNG) is not available.

However, the government remained indifferent to the unscrupulous owners of petrol pumps, who closed their sale from Sunday evening till midnight to capitalise on the illegal windfall profits by not selling the stocks, which the owners had purchased at old prices.

The increase in diesel will also bring financial miseries to the farmers’ community. The country is facing over 30 per cent water shortage, which has further aggravated because of the four-month drought. Now the farmers would have to use the ground water through tubewells, which are mainly operated through diesel, where the electricity is not available because of the massive power outages.

The federal government has linked the local prices with the developments in the international oil market and has been passing the impact to the domestic prices accordingly. The Arab Gulf petroleum product prices showed steep increase during the month of January 2010, and, therefore, the Ogra notified the revised prices of petrol, HOBC, kerosene and LDO upward w.e.f February 01, 2010.