Managerial Accounting Essay Example for Free

Managerial Accounting Essay Explain the distinguishing features of managerial accounting. Identify the three broad functions of management. Define the three classes of manufacturing costs. Distinguish between product and period costs. Explain the difference between a merchandising and a manufacturing income statement. Indicate how cost of goods manufactured is determined. Explain the difference between a merchandising and a manufacturing balance sheet. Identify trends in managerial accounting. Managerial accounting is a field of accounting that provides economic and financial information for managers and other internal users. (b) Mary is incorrect. Managerial accounting applies to all types of businesses—service, merchandising, and manufacturing. (a) Financial accounting is concerned primarily with external users such as stockholders, creditors, and regulators. In contrast, managerial accounting is concerned primarily with internal users such as officers and managers. Financial statements are the end product of financial accounting. The statements are prepared quarterly and annually. In managerial accounting, internal reports may be prepared as frequently as needed. The purpose of financial accounting is to provide general-purpose information for all users. The purpose of managerial accounting is to provide special-purpose information for specific decisions. 2. (b) (c) 3. Differences in the content of the reports are as follows: Financial †¢ Pertains to business as a whole and is highly aggregated. †¢ Limited to double-entry accounting and cost data. †¢ Generally accepted accounting principles. Managerial †¢ Pertains to subunits of the business and may be very detailed. Extends beyond double-entry accounting system to any relevant data. †¢ Standard is relevance to decisions. In financial accounting, financial statements are verified annually through an independent audit by certified public accountants. There are no independent audits of internal reports issued by managerial accountants. 4. Budgets are prepared by companies to provide future direction. Because the budget is also used as an evaluation tool, some managers try to game the budgeting process by underestimating their division’s predicted performance so that it will be easier to meet their performance targets. On the other hand, if the budget is set at unattainable levels, managers sometimes take unethical actions to meet targets to receive higher compensation or in some cases to keep their jobs. Karen should know that the management of an organization performs three broad functions: (1) Planning requires management to look ahead and to establish objectives. (2) Directing involves coordinating the diverse activities and human resources of a company to produce a smooth-running operation. (3) Controlling is the process of keeping the company’s activities on track. Disagree. Decision making is not a separate management function. Rather, decision making involves the exercise of good judgment in performing the three management functions explained in the answer to question five above. Employees with line positions are directly involved in the company’s primary revenue generating operating activities. Examples would include plant managers and supervisors, and the vice president of operations. In contrast, employees with staff positions are not directly involved in revenuegenerating operating activities, but rather serve in a support capacity to line employees. Examples include employees in finance, legal, and human resources. 5. 6. 7. 1-4 Copyright  © 2010 John Wiley Sons, Inc. Weygandt, Managerial Accounting, 5/e, Solutions Manual (For Instructor Use Only) Questions Chapter 1 (Continued) 8. CEOs and CFOs must now certify that financial statements give a fair presentation of the company’s operating results and its financial condition and that the company maintains an adequate system of internal controls. In addition, the composition of the board of directors and audit committees receives more scrutiny, and penalties for misconduct have increased. The differences between income statements are in the computation of the cost of goods sold as follows: Manufacturing company: Merchandising company: 10. Beginning finished goods inventory plus cost of goods manufactured minus ending finished goods inventory = cost of goods sold. Beginning merchandise inventory plus cost of goods purchased minus ending merchandise inventory = cost of goods sold. 9. The difference in balance sheets pertains to the presentation of inventories in the current asset section. In a merchandising company, only merchandise inventory is shown. In a manufacturing company, three inventory accounts are shown: finished goods, work in process, and raw materials. Manufacturing costs are classified as either direct materials, direct labor, or manufacturing overhead. No, Matt is not correct. The distinction between direct and indirect materials is based on two criteria: (1) physical association and (2) the convenience of making the physical association. Materials which can not be easily associated with the finished product are considered indirect materials. Product costs, or inventoriable costs, are costs that are a necessary and integral part of producing the finished product.

Essay --

Smoking Smoking is an addicting habit on the rise worldwide. Smoking across the globe has many different forms from cigarettes and cigars to pipes and shisha’s. There are many different reasons for smoking whether it is for medicinal reasons or recreational use. Smoking has been around for a very long time and in this essay I will discuss the origins of smoking, the serious health risks, economical burdens, the addicting materials as well smoking among teenagers. Despite efforts from governments and organizations to bring awareness to people across the globe of the serious dangers and implications of smoking, the number of smokers worldwide generally remains on the rise. Brief History Of Smoking Smoking in one form dates back to as early as 5000 BC. It was used in shamanistic rituals to allow the users to achieve a state of trance and connect with the spirit world. Cannabis smoking quickly spread through Africa and the Middle East almost 3000 years ago. Smoking was sighted in England as far back as 1556 and then spread to France in 1560. Tobacco was then brought into Africa by French traders in the early 1600’s. Tobacco at that time was chewed or smoked. Around that time many religious leaders banned smoking and considered it immoral and even blasphemous. The first machine made to produce cigarettes was made by James Bonsack in 1881 after the civil war. The negative effects of smoking were brought to public attention in 1929 by the paper published linking cancer and smoking. During the Great Depression and in Nazi Germany, Hitler viewed smoking as unnecessary and a waste of money and also that woman who smoked as unsuitable to be mothers and wives. After the Second World War, anti-smoking groups lost popularity and smoking increas... ...lic places including universities, shopping centers, cafes and restaurants. This bans includes shisha’s (Kuwait Bans Smoking, 2012). Also many governments have set up a â€Å"quit smoking† number and website to assist in quitting smoking.                   Conclusion Smoking has been prevalent worldwide for thousands of years and according to the World Health Organization looks to increase even more. Currently over 1 out of 7 people are smokers. There are many health risks associated with smoking and deaths due to smoking are more than 5 million people every year and has a large economic impact globally. This is more than double the deaths due to natural causes. Smoking is more and more prevalent in teenagers in today’s world due to advertising through the internet and peer pressure. Many anti-smoking organizations were set up to help people quit smoking and to raise awareness.

ADHD Nutrition

ADHD is a disease which weakens the release and homeostasis of neurological chemicals. In full the initials stand for Attention Deficit Hyperactivity Disorder.Research shows that ADHD is a hereditary disorder that is it can be passed on through genes.Its occurrence comes with many other disorders such as being defiant, learning disorders and other behavioral disorders ( Paul, 2000 p.4 )There are no specific laboratory tests to establish this condition. The diagnosis can be made upon the parents careful evaluation of their past to see whether they could have had symptoms similar to those that are clear indicators of the disease.Useful tests to diagnose the condition can be through achievement tests that can be used to measure the learner’s learning disorders.Drugs used to treat the disorder are noted to be very addictive. However, psychological treatment can be very helpful. It is also important to note that the drugs used are only used to control the situation and not to treat it.Symptoms of this condition include being restless, lack of concentration, and if there is some, they last for a short time, the child is easily distracted, engagement in excess activities and being impulsive. It can also lead to many allergies to additives and food dyes.More boys are affected by this condition by girls, a phenomenon that has been explained as being as a result of the aggressive nature of boys as opposed to the girls. Many people believe that there is a relationship between food additives and hyperactivity which is seen in this condition called ADHD.The question as to whether there is a relation between nutrition is a claim that has no scientific proof. Many scientists have ended their researches inconclusively.Though claims that there are causes of ADHD that are related to diet–specifically a diet that contains food additives or is high in sugar–and allergies, these claims were seriously investigated by a number of scientists and according to Paul, ( 2000 ) â€Å"many parents whose children are affected by this condition participated† ( p.42 ) Their concern was whether sugar could cause the symptoms of ADHD.Scientific studies show that sugar and carbohydrates cannot cause the symptoms of ADHD, but rather children with this condition can react with sugars in differently from the rest. However, there are no marked effects identified. In fact in one study ADHD children’s reaction to carbohydrates was better than that for proteins surprisingly. This fact also applies with the vitamins and ADHD.Regulated intake can help the situation rather than the exaggerated belief that it causes ADHD related symptoms. Neither too much sugar nor deficiency in vitamins can cause ADHD. The condition cannot be improved by excessive intake of vitamins as the results might be negative since some vitamins when taken in excess can be harmful.  The other causes identified include lead poisoning which has been known for a long time as a major cause of psychological problems. Its interesting that even those children who have not consumed lead can develop the condition may be as a result of breathing in or rather inhaling fumes from the vehicles, nearby industries especially for those in urban centers.Even though many researchers try to dissociate ADHD with nutrition, there is further evidence that reduction of certain additives in foods can be a good way of reversing the c ondition.It has also been observed that the blood of children suffering from this condition has a low DHA fat level. In addition, beneficial nutrients from greens, certain fish, and an adequate level of the DHA fats is a superb way of reversing such conditions in children who suffer from this condition. Recommended dose for the DHA fat is 100mg to 600 mg, according to the age and condition of the child.

A Whack on the Side of the Head – Paper

Creativity can be the source of fame and success, but tapping into this resource can be difficult for some. Some say that you are either born with or without creativity, while others argue that it is learned and absorbed throughout a person’s lifetime. In either case, there has to be a trigger that can jump-start the creative process for those who are in need a creative spark. Roger von Oech’s A Whack on the Side of the Head is a short book describing how to figuratively â€Å"whack† some creativity into people.Roger von Oech states that there are ten mental blocks that hinder creativity, and sometimes, all people really need is a whack on the head to think differently and more clearly about their current situations. Members of society do not have a need to be creative for most of what they do, but for when people need to â€Å"think something different† these mental locks need to be identified and opened. Without unlocking the mind of its creative hindran ces, new technologies and inventions would cease to exist.Roger von Oech’s book discusses the various techniques and tips to whack people’s thinking, and tries to enlighten his readers with mentally stimulating puzzles and theories. A Whack on the Side of the Head is primarily sectioned into the ten mental locks that von Oech feels are forcing people to think â€Å"more of the same† in multiple situations. Each lock must be identified and overcome to progress toward a more creative and fulfilling lifestyle. The first mental lock is looking for the right answer. The educational system has taught us to always look for the single, correct answer.This is acceptable in most academic situations, but the problem with applying this â€Å"one right answer† philosophy in real world applications is that people stop searching for answers once they have found one that works. There are multiple solutions to problems, and just because one seems correct, it may not be th e most correct. Looking for the second and third right answers can lead to more efficient and innovative production. The second mental lock is thinking that something isn’t logical. There are two ways of thinking, hard and soft. Things with a hard side have one correct answer, while soft sided thinking has many correct answers.Also, there are two main phases in the creative development of ideas. The first phase is the imaginative phase, where one generally plays with ideas and asks many â€Å"what if† and â€Å"what rules can I break† type questions. On the other hand, practical thinking evaluates and executes ideas by asking questions such as â€Å"what is the deadline† and â€Å"who can help us? † Soft thinking is quite effective in the imaginative phase when searching for new ideas, while hard thinking is best used during the practical phase when one is preparing to carry and idea into action.Both thinking techniques should be used to produce mo re and better ideas, even when a certain style of thinking does not seem logical. The next creativity lock is always following the rules. Roger von Oech doesn’t become cliche by saying â€Å"rules are meant to be broken† but he does insist that some rules should be challenged. In an ever-changing world, some rules are outdated and should adapt the appropriate, current way of living. For example, basketball used to have a jump ball after every basket. In 1938, after almost a half decade of basketball, this ruling finally was changed in order to make game play more continuous.It just made sense to break and change this rule for so long, but no one ever suggested it. One should be flexible with the rules. Breaking and bending the rules won’t necessarily lead to creative ideas; it is one possibility. Many rules outlive the purpose to which they were intended, and thus should be occasionally challenged. Always being practical is an encumbrance to creativity. This wor ld was built by practical people, but they knew when to unleash their creative side and achieve an imaginative frame of mind. The author proposes asking â€Å"what if? questions throughout your day to try to spark some creativity. These questions can then be used as stepping stones towards a new idea, and although the questions will not always yield brilliance, they will surely make someone more productive. Another strange, yet effective, manner of being impractical is imagining yourself as the idea. Let’s say, for example, that you are in charge of designing a new parking meter. You could ask questions such as â€Å"What does it feel like when my time has expired? † or â€Å"What would I look like if I took credit cards? These silly questions could actually initiate a completely new design of debit card system parking meters. Being impractical not only allows ourselves to think differently, but it can almost always lead to new ideas. Roger von Oech’s fifth me ntal lock is thinking that play is frivolous, as well as pausing your mind. One must break free from their dull tactics and allow themselves to play with an idea. Having fun is one of the most positive motivators in the workplace and it is contagious, causing others around you to want to get in on the action.By playing and having fun, one can rid any preconceived notions about the proper way to do things and truly direct productive and creative thinking towards a new idea. Along with fun, taking a break to let your mind unwind can be useful in trying to solve a problem. Many times, people will have a problem on their mind all day but will never come up with a solution. Then on their drive home, while thinking about absolutely nothing, an idea, almost magically, pops into their head and they have their solution. Software developer Rick Tendy says, â€Å"I never try to solve a problem by solving it. By putting your problem on the mental back burner, one can put the problem into persp ective, it allows the seed of the problem to grow over time, and lastly, it allows a person to approach the same problem later with new assumptions and focus. The next creative lock is saying to yourself â€Å"That’s not my area. † One shouldn’t rely too heavily on specializations when creating an idea. When this happens, a person many not only delimit their problems to too small an area, they may also stop looking for ideas in other fields.These people will stop searching for an answer because it is â€Å"an administrative problem† or â€Å"only a computer person would know this. † One has to look outside their area of expertise to find solutions. For example, if you are an engineer with a problem, it might be beneficial to think of how an artist or a teacher would find a solution. By looking at a problem from different perspectives, a whole new realm of creativity can be unlocked. ADD MORE. Trying not to be foolish is major way to limit creativit y and get stuck in a routine of being sensible with decisions.Conforming to society may make people feel safe and secure, but not one single invention has come from this thinking. Someone has to be foolish, by either consulting a fool or being the fool themselves. Roger von Oech says that a fool keeps people from always thinking the same things. In other words, even though they may be a fool, they bring a new way of thinking that is full of interesting and silly ideas. People must let their â€Å"stupid monitor† down and allow themselves to play with dumb ideas and see if they work. However, you must be prepared to laugh at yourself and not be worried about being embarrassed.Just like having fear of being wrong, one can’t expect to have silly ideas and most of them not work. The next creative mental lock is avoiding ambiguity. Creative minds think ambiguously and they let ideas be open to interpretation. Just because everyone has the same notions and ideas regarding a certain problem, doesn’t mean that it is correct, or the most correct. Avoiding ambiguity is an especially good idea in practical situations where the consequences of misunderstanding would be serious. In imaginative situations, however, this manner of thinking stifles your imagination and ingenuity.There is a place for ambiguity, perhaps not so much while evaluating and executing ideas, but certainly when you are searching for and playing with them. Another way to be ambiguous is to let an oracle decide, or in other words, use a random outside source. Let random, unexpected information stimulate your imaginations. Native American Indian medicine men used to let wet rawhide dry in the sun, and the resulting wrinkles in the leather would be their new hunting map where the wrinkles represented new trails for the hunters to follow.Ambiguity was used to solve the Native Americans problem of diminishing game on their current hunting trails, and can be used today in the same manner . The next mental lock incorporates many other locks. This lock is thinking â€Å"to err is wrong† or that one must be correct all of the time to have a positive result. You must be wrong to be creative. Inventors do not get things right the first, second, tenth, hundredth, and so on time. They may go years without finding the correct solution, but they are allowing narrowing in on the answer but allowing themselves to fail.Thomas Edison said that he knew 1,800 ways to â€Å"not† make a light bulb. Christopher Columbus thought he was finding a shorter route to India. One of Madame Curie’s failures was radium. Failures give us an opportunity to try a new approach. Maybe you find a new way to â€Å"not fail† which leads to a new idea. If you make an error, use it as a stepping stone to an idea you might have otherwise not discovered. As Woody Allen says, â€Å"If you’re not failing every now and again, it’s a sign you’re not trying any thing very innovative. † The last lock is simply thinking that you are not creative.If you want to be more creative, believe in the worth of your ideas, and have the persistence to continue building on them. With this type of attitude, you will be open to take more risks, learn how to fail, search for more than one answer, and occasionally break some rules. By giving yourself a creative license, you allow yourself to be silly, imaginative, and foolish even if that isn’t typically you. By applying all of the mental lock remedies, you will be on your way to a great idea, and by doing so, you will be able to whack yourself into creativity. ADD MORE.Now once you have an idea, you must use it. Someone can be the most creative person in the world and have millions of terrific ideas, but if those ideas aren’t carried into fruition, it is almost pointless. People who are successful in the creative process can master four key roles to allow themselves to move from incepti on into deployment. Each of these four roles embodies a different method of thinking. The first is the explorer who searches for new information and resources. The explorer pokes around in new areas and seeks out a variety of different information.The next role is the artist, whose responsibilities are to turn these resources and information into new ideas. The artist follows their intuition, asks â€Å"what if? ’ questions, and breaks or creates rules of their own. The third role is the judge who evaluates the merits and validity of the idea. The judge runs risk analyses, questions assumptions, and listens to their gut. The judge ultimately makes a decision on the idea. The last role is the warrior, whose sole responsibility is to carry an idea into action. You must have the courage and desire to do what is necessary to make your idea a reality.By mastering these roles, Roger von Oech says you will be a master of creativity. Roger von Oech has conducted creativity seminars with renowned companies such as CBS, Coca- Cola, GE, HP, and IBM to name a few. These companies all hired his services because they know of the true value of creativity throughout any phase of organizational behavior, individual, group, and organization. Organizational performance depends on individual performance from the entire work force. Hiring and molding creative workers is an excellent way to increase efficiency and boost morale in the office.Managers seek creative individuals for two basic reasons. One, they bring fresh thoughts which lead to better productivity. Secondly, they are frequently much better workers as they are not solely preoccupied with results, but rather the steps involved in achieving these results. Anyone can find an answer once, but what truly makes creative individuals an asset to an organization is their desire to find multiple correct answers in any scenario. Just as individuals are important, how groups of individuals collaborate with their creative m inds and ideas is beneficial to any company.Without a creative team of workers, a group would only be as strong and adaptive as its most intuitive member. For example, if a manager organizes a team of mostly uncreative workers, one can expect that this group will get its work done, but not offer any alternatives or advanced results. On the contrary, a group comprised of many creative minds will not only produce the desired results, they may in fact find better ways of solving problems and perhaps challenge rules to make the production more efficient.With creative mental locks slowing down idea creation, it can be seen as imperative to mold individuals into creative workers. Lastly, the entire organization will benefit from its employees ridding themselves of these deterring mental locks. This creative behavior processes give life to an organization. An organization thrives on its ability to be adaptive to change, and its ability to create the changes themselves. Apple revolutionized the concept of digital media with their iPod, and it was due to creative individuals who had disregard for the way other companies were thinking.This type of thinking is the mother of invention, which brings about a happy workforce, increased revenue, and job satisfaction. Improvements of individual, group, and organizational performance are an output of creative organizational behavioral changes and developments. This â€Å"whack in the head† thinking keeps the workplace from being monotonous and predictable, a characteristic that every organization hopes to avoid. In a society where companies race to put out the next best â€Å"tech toy,† it is crucial for any organization to heed Roger von Oech’s advice.Not only must every level of the organization be creative, they must have the will and desire to carry out their ideas into action. Creativity is a resource that will be valuable forever. Those organizations that have it will continue to be innovative, while those without will be forgotten about. The future will basically be dictated by innovative minds, and their ability to carry out brilliant ideas. A Whack on the Side of the Head was written more than 25 years ago, but all of the information is timeless.Organizational behavior has been, and always will be structured around the creative minds of the individuals, the camaraderie of the organization, and the overall effectiveness of the organization. Roger von Oech’s book demonstrates an importance on creativity that is sought after by every organization. The study of organizational behavior is a careful application of how people in groups and individuals act within an organization. Although creativity is only a single characteristic of people, it may be one of the most valued when groups are systematically studied.As stated before, the basic goal of any company is to take an idea or problem, and solve it with as little resources as possible. CEOs, program managers, and floor man agers alike could all benefit from this book both for personal development and to help their employees unlocked their minds. There will always come a time in the workplace where an individual or group will get stuck on a problem that will result in a negative effect all around them. By being creative, employees will be stimulating their mind and playing with ideas which lead to higher office morale.Interactions of workers is the whole principle behind organizational behavior, and more creative these workers are, the more positive and productive these individuals will be within their groups. A Whack on the Side of the Head has several practical applications in the workplace. Upon reading the book, a manager can use the knowledge attained to help employees solve problems by pinpointing which mental lock they need to overcome. Furthermore, these managers will also know the remedies that are stifling their workers. This book is a simple, yet enjoyable, read that can be processed on many levels.For the younger audience, this book is meant to create a future of limitless creativity by molding the mind. For the older, professional audience, this book retrains the mind to thinking differently and breaks old suffocating habits. WRITING STYLE. A Whack on the Side of the Head is a wonderful book for those looking to merely be more creative recreationally, or do so for the betterment of an organization. From an organizational behavior standpoint, Roger von Oech’s work will improve interactions individually, within a group, and among an entire organization by allowing new and exciting ideas flow freely from these now unlocked brains.

Ferguson Surname Meaning and Origin

Ferguson Surname Meaning and Origin FERGUSON Surname Meaning Origin: Ferguson is a patronymic surname meaning son of Fergus. The given name Fergus, comes from Fearghas, derived from the Gaelic fear meaning man, and gus meaning vigor. FERGUSON is the 34th most common surname in Scotland. Surname Origin: Scottish, Irish Alternate Surname Spellings: MACFERGUS, FERGESEN, FERGERSON, FURGUSUN, FERGERSEN, FERGUSSON, FARGUSON Famous People With the Surname FERGUSON Harry Ferguson - Irish inventor and pioneerAdam Ferguson - Scottish philosopher, sometimes called the father of modern sociology.Patrick Ferguson - Scottish officer in the British Army, inventor of the breech-loading rifle. With the help of this weapon, the Americans were defeated at the Battle of Brandywine (1777).Colin Ferguson - murderer found guilty of the Long Island Railroad Massacre Genealogy Resources for the Surname FERGUSON Common Scottish Surnames Their MeaningsUncover the meaning of your Scottish last name with this free guide to Scottish surnames meanings and origins. Common Surnames of IrelandDiscover the meaning of your Irish last name, and find where in Ireland these Irish surnames are most commonly found. Ferguson GenealogyWebsite dedicated to helping Ferguson family researchers connect to their 18th Century Virginia roots. Fergus(s)on DNA ProjectA DNA project spearheaded by the Clan Fergusson Society of North America to create a database of DNA corresponding to different Scottish and Irish subdivisions such as those discussed in Records of the Clan and Name of Fergusson, Ferguson and Fergus, by James Ferguson and Robert Menzies Fergusson, Edinburgh, 1895. Ferguson Family Genealogy ForumSearch this popular genealogy forum for the Ferguson surname to find others who might be researching your ancestors, or post your own Ferguson query. FamilySearch - FERGUSON GenealogyFind records, queries, and lineage-linked family trees posted for the Ferguson surname and its variations. FERGUSON Surname Family Mailing ListsRootsWeb hosts several free mailing lists for researchers of the Ferguson surname. Cousin Connect - FERGUSON Genealogy QueriesRead or post genealogy queries for the surname Ferguson, and sign up for free notification when new Ferguson queries are added. Looking for the meaning of a given name? Check out First Name Meanings Cant find your last name listed? Suggest a surname to be added to the Glossary of Surname Meanings Origins. - References: Surname Meanings Origins Cottle, Basil. Penguin Dictionary of Surnames. Baltimore, MD: Penguin Books, 1967. Menk, Lars. A Dictionary of German Jewish Surnames. Avotaynu, 2005. Beider, Alexander. A Dictionary of Jewish Surnames from Galicia. Avotaynu, 2004. Hanks, Patrick and Flavia Hodges. A Dictionary of Surnames. Oxford University Press, 1989. Hanks, Patrick. Dictionary of American Family Names. Oxford University Press, 2003. Smith, Elsdon C. American Surnames. Genealogical Publishing Company, 1997.

Capital Account Convertibility Essay Example for Free

Capital Account Convertibility Essay Capital Account Convertibility. Should India adopt full convertibility? Capital Account Convertibility-or a floating exchange rate-is a feature of a nation’s financial regime that centers around the ability to conduct transactions of local financial assets into foreign financial assets freely and at market determined exchange rates. It is sometimes referred to as Capital Asset Liberation or CAC. CAC is mostly a guideline to changes of ownership in foreign or domestic financial assets and liabilities. Tangentially, it covers and extends the framework of the creation and liquidation of laims on, or by the rest of the world, on local asset and currency markets. Current account convertibility allows free inflows and outflows for all purposes other than for capital purposes such as investments and loans. In other words, it allows residents to make and receive trade-related payments receive dollars (or any other foreign currency) for export of goods and services and pay dollars for import of goods and services, make sundry remittances, access foreign currency for travel, studies abroad, medical treatment and gifts, etc. Capital account convertibility is considered to be one of the major features of a developed economy. It helps attract foreign investment. It offers foreign investors a lot of comfort as they can re-convert local currency into foreign currency anytime they want to and take their money away. At the same time, capital account convertibility makes it easier for domestic companies to tap foreign markets. At the moment, India has current account convertibility. This means one can import and export goods or receive or make payments for services rendered. However, investments and borrowings are restricted. But economists say that Jumping into capital account convertibility game without considering the downside of the step could harm the economy. The East Asian economic crisis is cited as an example by those opposed to capital account convertibility. Even the World Bank has said that embracing capital account convertibility without adequate preparation could be catastrophic. But India is now on firm ground given its strong financial sector reform and fiscal consolidation, and can now slowly but steadily move towards fuller capital account convertibility. CAC has 5 basic statements designed as points of All types of liquid capital assets must be able to be exchanged freely, between any two nations, with standardized exchange rates. The amounts must be a significant mount (in excess of $500,000). Capital inflows should be invested in semi-liquid assets, to prevent churning and excessive outflow. Institutional investors should not use CAC to manipulate fiscal policy or exchange rates. Excessive inflows and outflows should be buffered by national banks to provide collateral. Prior to its implementation, foreign investment was hindered by uneven exchange rates due to transactions, and national banks were disassociated from fiscal exchange policy and incurred high costs in supplying hard-currency loans for those few local companies that wished to do business abroad. Due to the low exchange rates and lower costs associated with Third World nations, this was expected to spur domestic capital, which would lead to welfare gains, and in turn lead to higher GDP growth. The tradeoff for such growth was seen as a lack of sustainable internal GNP growth and a decrease in domestic capital investments. When CAC is used with the proper restraints, this is exactly what happens. The entire outsourcing movement with Jobs and factories going oversees is a direct result of the foreign investment aspect of CAC. The Tarapore Committee’s recommendation of tying liquid assets to static assets (i. e. investing in long term government bonds, etc) was seen by many economists as directly responsible for stabilizing the idea of capital account liberalization. The Reserve Bank of India has appointed a committee to set out the framework for fuller Capital Account Convertibility. The Committee, chaired by former RBI governor S S Tarapore, was set up by the Reserve Bank of India in consultation with the Government of India to revisit the subject of fuller capital account convertibility in the context of the progress in economic reforms, the stability of the external and financial sectors, accelerated growth and global integration. Economists Surjit S Bhalla, M G Bhide, R H Patil, A V RaJwade and Alit Ranade were the members of the Committee. The Reserve Bank of India has also constituted an internal task force to re-examine the extant regulations and make recommendations to remove the operational impediments in the path of liberalisation already in place. The task force will make its recommendations on an ongoing basis and the processes are expected to be completed by December 4, 2006. The Task Force has been set up following a recommendation of the Committee. The Task Force will be convened by Salim Gangadharan, chief general manager, in- harge, foreign exchange department, Reserve Bank of India, and will have the following terms of reference: Undertake a review of the extant regulations that straddle current and capital accounts, especially items in one account that have implication for the other account, and iron out inconsistencies in such regulations. Examine existing repatriation/ surrender requirements in the context of current account convertibility and management of capital account. Identify areas where streamlining and simplification of procedure is possible and remove the operational impediments, especially in espect of the ease with which transactions at the level of authorized entities are regulations are consistent with regulatory intent. Review the delegation of powers on foreign exchange regulations between Central Office and Regional offices of the RBI and examine, selectively, the efficacy in the functioning of the delegation of powers by RBI to Authorised Dealers (banks). Consider any other matter of relevance to the above. The Task Force is empowered to devise its work procedure, constitute working groups in various areas, co-opt permanent/special invitees and meet various trade ssociations, representative bodies or individuals to facilitate its work. Capital Account Convertibility. (2018, Oct 17).

The Cold War and U.S. Diplomacy Assignment Example | Topics and Well Written Essays - 750 words

The Cold War and U.S. Diplomacy - Assignment Example The diplomatic doctrine President Truman followed was that United States would provide political, economic, and military service to all democratic nations which were under the threat of external or internal authoritarian forces (Milestones: 1945-1952. In the initial years, America really protected the interests of its ally Turkey. It was the nature of America to manipulate its foreign policies for its own advantage. However, it never tried to take any undue advantage from the relation with Turkey unlike it did in Afghanistan. American policy after the Truman declaration was always in favor of Turkey. As America never wanted the Soviet Union to grow bigger than it and the communist party to spread to other parts of the world, it decided to support Turkey; both politically and financially. American foreign policy was thus aimed at promoting democracy in its friendly nations. As Carpenter (1999) points out, though Turkey faced some real threats from the Soviet Union like the overpowerin g of the current government with a communist government, Turkey overcame them with American support and moved to a democratic form of government from the single party government that existed. In return to the support and help rendered by the United States during Cold War, Turkey agreed to send its forces to take part in the Korean War. Also, America provided all support to Turkey to become a member of NATO. Turkey became a founding member of the Central Treaty Organization. After these initial years, the relation between the duo began to deteriorate gradually; though for a short period of time. According to Carpenter (1999), the main reason for the break up was the attack by Turkey on Cyprus on the pretext of saving the ruling government from the imminent coup by army. It was an evident breach of the international law and the UN charter. Moreover, it was against the American policy of opposition against aggression because Turkey was pointlessly attacking Cyprus. Though the United St ates was supposed to adopt stringent measures against its alley as the lack of such measures would invite widespread criticism, the American Congress managed to reduce the measures to a meager ban on arm sales to Turkey. Still, the step resulted in creating too much tension and mistrust in the relation between the duo. However, the action of the US can be justified on the ground that Turkey violated the agreements and international law (cited in ‘Turkish invasion and Cyprus occupation’, 2005). When all these tensions ended, the Turkish leaders once again felt the need to be closer to the US. For, an ally like the US was essential to ensure the future security of Turkey in the Middle East.