Traditional commerce is part of a business that has all activities that facilitate exchange. Trade and auxiliaries of trade are kinds of traditional commerce whereas e-commerce refers to the exchange of goods & services, funds/information between customer and business by means of an electronic networkThe major differences between Electronic commerce (E-commerce) and traditional commerce are as follows −E-commerceTraditional commerceIt is cost-effective.It is less cost-effective than E-commerce.No role of middlemen.Middlemen have a role to play in traditional commerce.Less overhead cost.High overhead cost than E-commerceTakes less time.Takes more time.Better connectivity.No better connectivity.Size of business is easily expandable.Size of business is not easily ... Read More

Offer and invitation to offer are two different terms having separate meanings. An offer is a proposal and invitation of offer is to invite some body to make a proposal. Offer leads to enter into contract while invitation of offer leads to offer.Now let us understand the meaning of both separatelyOfferIt is the expression of person to show their willingness to another to do something or not to do something. Offer must be certain, complete and define in their respects. Offer is legally bind and acceptance of offer results in valid contract.Types of offersGeneral offerCross offerCounter offerStanding offerSpecific offerInvitation to ... Read More

Before going for differences, first let us understand the difference between contract and agreement and their typesAgreementAgreement is commitment made or proposal made by a person or a promisor to offer something to another person or a promisee and that promisee accepts that proposal with same considerations. Then it is called as agreement.Types − some of types of agreements areVoid agreementIllegal agreementImplied agreementExpress agreement etc.ContractIf an agreement is legally enforceable for doing or for not doing then it is called as contract. Contract must contains offer, acceptance, unconditional considerations and adequate. These are also called as elements of contract.Types − ... Read More

The word synergy is commonly used in merger and acquisition. Finical benefits are achieved through merger of companies. Concept of synergy is the value and performance of individual companies is less than the value and performance of merged companies. By cross disciplinary workgroups, companies achieve synergies between departments.The main goal is to improve financial performances. Business merger is to form a business which is capable of producing more revenue than they produce individually. Significant cost reduction can be achieved by streamline their process.Synergies effectiveness may take time; typically it takes 2 to 3 years. This period is called the “phase ... Read More

The terms used in Merger & Acquisition are explained below −Acquirer − It is someone who purchases a company.Acquisition − A company (1) taking control over another company (2) by purchasing more than 50% shares in company (2).Amalgamation: − Combining two companies into a single company.Asset deal − Acquirer buys only assets of selected companies.Backward integration − Acquires purchases of Ancillaries Company of its own product.Bootstrap effect − Bad reason to merge.Cash considerations − Part of purchase price is given in the form of cash.Compensation manipulation − Bad reason to mergeConglomerate − Merge of unrelated units.Debt issuance fees − Charges ... Read More

The major differences between a passbook and a cash book are as follows −PassbookPassbook is the book which is issued by the concerned bank, which contains the details of account holder(s) and information related to the transactions (deposits and withdrawals) of the holder(s).These are prepared by banks. In this book, all the deposits of the holder are shown on the credit side and the withdrawals of the holder are shown on the debit side.Preparing these books is compulsory.Cheque issued to the creditor is recorded when the amount is paid by the bank. Cheque deposited for collection is recorded on the ... Read More

Errors in trial balance are classified into two types namely, errors disclosed and errors not disclosed. Errors disclosed and errors not disclosed are again subdivided into several types.Following diagram shows the classification of errors in trial balance −Classification of errors based on natureThe classification of errors in trial balance which is based on nature is explained below:Error of omissionError of complete omissionError of partial omissionError of commissionError of recording in book of original entryWrongly totaling of subsidiary bookError in balancing ledger accountsError of posting − This is further classified as follows −Posting to the wrong side, but on the correct ... Read More

Trail balance is worksheet which consists of all ledger balances and columned them as debit and credit. Later these debit and credit columns are equaled. Trail balance ensures entries are mathematically proven. It is prepared at end of reporting period and repeated for every period.To understand trail balance once should understand following conceptsDouble entry systemJournalLedgerThe steps which are followed to prepare the trial balance are as follows −Step 1 − Prepare a columnar table which consists of four columns namely account number in column 1, account name in column 2, debit in column 3 and credit in column 4.Step 2 ... Read More

Petty cash is nothing but small amount of cash that kept for minor expenses like office supplies, reimbursing employee, and payment for catered lunch etc. In big companies or in larger companies each department has its own petty cash. The main advantage of having petty fund it is convenient and quick to use. Main disadvantage of having Petty cash is it can be theft, misuse and these funds are monitored periodically.Sometimes there is confusion between cash in hand and petty cash. Petty cash refers to money (specifically) whereas cash on hand is accessible cash of business.There are three stages in ... Read More

Triple column cash books have three columns on both the debit and credit side of the cash book. These cash books record cash transactions, bank transactions and discounts. Both cash and bank transactions of column cash books are balanced and totaled periodically; discount column of triple column cash books is only totaled, but not balanced.Separate accounts are maintained in the general ledger for discount allowed and received. Discount column on the debit side represents a discount given to customers during a period.Discount allowed is an expense and this column on the credit side represents discount from suppliers during a period. ... Read More