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Functions performed by a financial system are :
- Saving function: Public saving find their way into the hands of those in production through the financial system. Financial claims are issued in the money and capital markets which promise future income flows. The funds with the producers result in production of goods and services thereby increasing society living standards.
- Liquidity function: The financial markets provide the investor with the opportunity to liquidate investments like stocks bonds debentures whenever they need the fund.
- Payment function: The financial system offers a very convenient mode for payment of goods and services. Cheque system, credit card system etc are the easiest methods of payments. The cost and time of transactions are drastically reduced.
- Risk function: The financial markets provide protection against life, health and income risks. These are accomplished through the sale of life and health insurance and property insurance policies. The financial markets provide immense opportunities for the investor to hedge himself against or reduce the possible risks involved in various investments.
- Policy function: The government intervenes in the financial system to influence macroeconomic variables like interest rates or inflation so if country needs more money government would cut rate of interest through various financial instruments and if inflation is high and too much money is there in the system then government would increase rate of interest.
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Differentiate cost accounting system from financial accounting system?
Q.5 Differentiate Financial Accounting and Management accounting
What GFEBS business process area reports the financial status of the Army?
The GFEBS (General Fund Enterprise Business System) business process area that reports the financial status of the Army is the Financial Management area. This area encompasses various functions such as budget execution, fund control, and financial reporting, enabling the Army to maintain accurate and timely financial records. It plays a crucial role in ensuring compliance with federal regulations and facilitating decision-making through detailed financial analysis.
Which general financial management system provides real time summary record balances?
A general financial management system that provides real-time summary record balances is commonly referred to as an Enterprise Resource Planning (ERP) system. These systems integrate various functions, including accounting, finance, and supply chain management, allowing for up-to-date financial reporting and analysis. By consolidating data from different departments, ERPs enable organizations to monitor performance and make informed decisions based on current financial positions. Popular examples include SAP, Oracle, and Microsoft Dynamics.
What are the components of financial information system?
Funds management, financial accounting, controlling
Single entry system of book-keeping is a system of?
Providing true financial position
Five functions of the Australia financial system?
5 functions of the australian financial system
Write about the functions of Indian financial system?
To Provide or raise the capitalsaving FunctionA financial system or financial sector functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. A Financial System is a composition of various institutions, markets, regulations and laws, practices, money manager, analysts, transactions and claims and liabilities.
Functions and objectives of international financial management?
functions of financial management
What is the Difference between integrated and interlocking accounting system?
Integrated system is one which combines the cost accounting and financial accounting functions in one system of ledger accounts while an interlocking system has a cost ledger for the cost accounting function and a financial ledger for the financial accounting function.
What are the finance functions of a financial manager in current scenario?
what are the finance functions of a financial manager in current scenario?
What does financial stability means?
Financial stability is a state in which financial institutional system is fit to smoothly fulfill its basic functions and is resistant to economic shocks. For financial institutions, this means they have sufficient capital to manage certain operations in normal periods.
Functions of financial institutions to institutions?
provide financial services
Discuss goals and functions of the financial manager to board director?
Discuss goals and functions of the financial manager to board director?
Through its supervisory and regulatory banking functions the Federal Reserve System helps maintain a commercial banking system that is responsive to the nation's financial needs and objectives?
monetary policy
Through its supervisory and regulatory banking functions the Federal Reserve System helps maintain a commercial banking system that is responsive to the nation's financial needs and objectives.?
monetary policy
What is financial function in business organization?
financial functions of a business organization
What are the 3 major functions of the federal reserve system?
The Federal Reserve System serves three major functions: it conducts monetary policy to influence money supply and interest rates, aiming to promote maximum employment and stable prices. It acts as a bank for banks, providing financial services and ensuring the stability of the banking system. Additionally, the Fed supervises and regulates financial institutions to maintain the safety and soundness of the nation's banking system.
