Accounting and Finance Questions

A savings account is the most basic type of account at a bank or credit union, allowing you to deposit money, keep the funds safe, and withdraw funds as needed. Savings accounts typically pay interest on your deposits, which helps you grow your money, but rates are relatively low on these low-risk accounts.

A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines and electronic debits, among other methods.

Hence, Saving accounts usually offer higher interest rates than checking accounts.

A commercial bank is a type of bank that provides services such as accepting deposits, making business loans, and offering basic investment products.

Commercial bank can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to individual members of the public.

Bank Rate is the interest rate at which the RBI allows finance to commercial banks. By Bank Rate, we mean bank can regulate the level of economic activity.

Reconciling the bank statement monthly is an example of independent internal verification

Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.

The three steps in the accounting process are

1. Identification,

2. Recording, and

3. Communication. 

Hence, analyzing and interpreting financial reports is not involved in the accounting process.

Budgetary Control is establishment of budgets and the continuous comparison of actual results with the planned results. It computes the variances and after that management takes necessary actions to maintain favorable variations, through revision of the budgets.

A commercial bank is a financial body which performs the functions of accepting deposits from the general public and giving short term loans for investment with the aim of earning profit.