Notes, abstracts, papers, exams and problems of Economy

International Trade

Most international trade is the trade of goods. International trade of services is growing fast. International trade is not a one-winner, one-loser game; both countries could benefit from international trade. Free trade makes it possible to have more goods than in autarky, employing the same amount of labor, thus increasing the real wage (salario real).

Differences Between Internal Trade and International Trade

More trade opportunities, different countries and different rules, and exchange rates.

Advantages

Variety of natural resources, different wants/tastes, and cost differences.

a) Absolute Advantage

When the quantity of labor required per unit of product is smaller than what is required by the potential commercial partner.

b)

According to IAS 2, stocks are defined as assets: held for sale in the normal course of operation; in production ahead of a sale; or in the form of materials or supplies to be consumed in the production process or supply of services.

Cost of acquisition is understood as the value of the canceled invoice net of VAT.

IAS 2 defines these valuation methods: FIFO (First-In, First-Out) and PPP (Weighted Average Price).

Determining net realizable value should be based on the most reliable information available.

To consider an item as property, plant, and equipment (PPE), it must meet these criteria: it is acquired for sale, use in production, supply of goods and services, rental to others, or for administrative purposes, and is expected to be used for... Continue reading "Key Accounting Principles: Stocks, Valuation, and Financial Reporting" »

Key Factors for Business Location

When choosing a location for your business, consider these essential factors:

• Location:
  • Market demand: Analyze the interest in your product at the desired location. This includes assessing potential consumer response, competition, and other relevant market factors.
  • Supply of raw materials: Evaluate the quality and cost of materials.
  • Communication and transportation: Ensure easy access to the site and good communication for both customers and suppliers.
  • Utilities: Verify the availability and cost of electricity, water, and telephone services.
  • Construction and land costs: Note that these costs can vary significantly between areas.
  • Legislation: Understand the legal rules and restrictions, including tax, commercial, social,

Effective Internal Control

Internal control is responsible for managing all the money that a company receives from sales and other income, as well as its exits under a program to pay suppliers to cancel those coming and services.

Purpose of Effective Internal Control

• Protecting resources against waste, fraud, and shortfalls
• Promoting adequate accounting data
• Encouraging compliance with company policies
• Judging the efficiency of operations

Major Cash Inflows in the Company

1. Cash sales
2. Charges to customers
3. Borrowings
4. Sales of fixed assets

Items That Are Not Part of Cash

1. Vouchers boxes
2. Postdated checks
3. Returned checks
4. Tax stamps and mailing

Recommendations for Petty Cash Management

1. Make careful counts.
2. Separate the group cash.
3. The person doing the counting should

**Treasury**

The Treasury refers to the set of institutions responsible for raising the income needed to fund public services. Several institutions manage tax funds, including:

• State Treasury or Inland Revenue: Manages corporate income tax, among others, and public customs tariffs.
• Treasury of Autonomous Communities: Manages, among other things, donations and special taxes on certain transportation and electricity.
• Public Council Treasury: Manages, among others, business tax and taxes on real estate.

Taxpayers

• Individuals: Natural persons.
• Corporate Entities: Groups of natural persons forming associations, foundations, or corporations that have a distinct legal personality from their members.

Other bodies raising public funds include the General Treasury... Continue reading "Understanding the Spanish Tax System: Key Concepts and Processes" »

Product Demand and Inventory Management

Product Daily Demand: Average amount of product you plan to sell.

Safety Stock Day: Minimum amount in storage to avoid running out of goods if demand exceeds expectations. This safety stock depends, among other variables, on the:

• Provisioning Period: Replenishment period, time taken for the establishment to receive the goods from an order.
• Global Sales: Total sales of the establishment across all products.

Four Methods for Calculating Minimum Stock for Each Product Line

Replenishment Period Method: This method is based on the premise that the shelf space assigned to a product depends on the demand for the product and the time it takes to replenish the establishment with that product.

Sales Number Method: This... Continue reading "Retail Product Management and Shelf Optimization" »

Accounting Schools

School Contista (France): Edmond Desgranges - Accounting in 5 accounts.

Personalist School: Giuseppe Cerboni - Personification of accounts, legalistic approach.

Materialist School: Fabio Besta - Economic approach to accounting.

French Doctrine: Dumarchay - Theory of account values. Two accounts: integral and differential.

German School: Schmalenbach - Dynamic theory of balance. Schneider - Outlined the circulation of securities in the company, external and internal environments.

Accounting Interpretations

Legal: Cerboni - Guarantee against third parties.

Economic: Schmalenbach.

Formal: Schneider; Culminates with Mattessich.

Accounting: Empirical science with respect to an economic unit. The knowledge allows qualitative and quantitative... Continue reading "Accounting Schools and Principles: Evolution and Key Concepts" »

SMEs and Cooperatives in the Spanish Economy

Small and medium-sized enterprises (SMEs) and cooperatives are crucial business models in the Spanish economy, generating approximately 90% of employment.

Challenges of Small and Medium Enterprises

SMEs hold significant importance in the Spanish productive and commercial landscape. As a result of economic globalization, these enterprises face international challenges. These market challenges include a market without borders and the incorporation of technological changes. SMEs must address these challenges by leveraging their advantages and minimizing their disadvantages.

Benefits of SMEs

• Flexibility: The size and structure of SMEs allow for greater agility in adapting to changing market conditions.
• Proximity:

Key Terms in Trade, Transport, and Tourism

Trade Terms

• Accessibility: Property applied to a space to express its ease of access or connection to the rest of the set.
• Bulk Trade: The trade is done with products packaged or labeled, which are sold by the merchant in the amount that the buyer wants.
• Distribution Network: Also called the commercial circuit, it refers to the relationship between points of sale and purchase. It varies depending on the goods and has a large spatial elasticity.
• Personal Services: Services directly engaged to meet a need of people, such as hairdressing or beauty services.
• Retail: Selling products directly to consumers in small quantities.
• Wholesale: Buying directly from producers and reselling the products to retailers in

STAKEHOLDERS: groups or people who depend on an organization to achieve their own goals and on whom, in its turn, an organization depends. They can be affected by the goals, actions or behaviours of the firm. Types: Internal (shareholders, directors, managers, employees), External: clients, suppliers, financial institutions, competitors, government..). Some external stakeholders may try to influence the strategy through their relationship with internal stakeholders. POWER/INTEREST: Goals: describe and analyze the stakeholders that can affect firm's strategy, analyze the game of power, manage the power and behavior of stakeholders. Stages: describe stakeholders, asses the power of each stks and potential coalitions, describe the interest of... Continue reading "Strategic Analysis: A Comprehensive Guide to Business Strategy" »