Explain how did the invention of credit revolutionized the economic system?

| Minimum
200 words and Maximum 350 words.

Coins were once constructed of a variety of materials, including silver, and were used as a
standard form of payment for trade. The value of the silver coins used in transactions is based
on people's trust in one another. It only has worth when it is exchanged for something else.
Money can have several forms, including silver coins, gold seashell bars, bank notes, and even
less valuable commodities. Clay tablets, for example, were employed as payment currency for
financial transactions by the Mesopotamian culture 4,000 years ago.

Explain how did the bond market influence history of nations? | Minimum 200 words and Maximum
350 words.

The originality of bonds dates to the Mesopotamian ages. Through years of constant
developments, it has become one of the most popular ways for government to raise funds.
Investors purchasing bonds and can expect an interest in return over time.

Bonds are an excellent means for the government to raise money for its national budget, in
addition to boosting taxes. However, if bonds are mismanaged, a financial crisis will almost
certainly emerge, with disastrous consequences.

Bonds have made a significant contribution to multiple battles in the past. For example, it
ensured the south's defeat in the American Civil War, but it can also have disastrous
repercussions, as it has already done in Argentina, which was formerly wealthy in terms of
economy.

Bond is a genuinely revolutionary notion that has changed the world of money. Rather than
raising already high taxes and requiring citizens to follow the rules, which may cause an outcry
among them, bringing greater harm and instability to the country, bond has made the world of
finance more secure. Citizens can now effectively and gladly lend their money to the
government, with some interest, thanks to the bond. Bonds are a liquid asset that can be readily
sold and consumed if things do not work out for the bond holder. Citizens can be viewed as
resourceful and strong investors in fund-raising campaigns in this way.

Originally, the concept of a bond in modern times was a win-win deal since everyone is satisfied
at the end of the day. Bonds help governments and enterprises generate funds for future needs,
and in reality, they have saved city-states from bankruptcy. Investors are happy because bonds
pay interest. However, paradise is not for everyone, and the more financially troubled a nation
is, the more bonds it will issue, so investors must be careful when dealing with bonds.

Explain how was the first joint stock company as well as stock market established and
how did the Mississippi bubble burst. | Minimum 200 words and Maximum 350 words.
The first joint stock company to appear in the world was the East India Company of Great Britain
(1600-1874). It was founded on October 31, 1860 by a group of 218 people, and was licensed to
do business exclusively for 15 years in East Asia. In the middle of the 15th century, in the central
trading cities of the West, merchants often gathered in coffee shops to exchange goods. At first
only a small group, gradually increased and gradually formed a separate market. By the end of
the 15th century, in order to be more convenient for business, the market became what was
called "market", with their unification of conventions and gradually the conventions were
completely revised into valid rules. compulsory for all members to participate in the "market".

Case study 1

(a)What form of business organization—proprietorship, partnership, or corporation—do you

recommend that Natalie use for her business? Discuss the benefits and weaknesses of each
form and give the reasons for your choice.

Natalie’s business is still emerging and new, she is still a second-year student, so her knowledge
and experience in running a business on her own is challenging, the business is still small, her
capital is not much also. Therefore, the best choice that I think Natalie should choose for her
form of business organization is proprietorship as she can easily managed it because it is small,
so she does not have any conflicts with anyone or having to share the profits between the
parties like partnership or corporation. Furthermore, as proprietorship, the laws applied to her
business is different and can be advantageous for her small-scale business (SME) such as tax
advantages. However, it is only advantageous as long as her strategy is to only maintain the
small size of the business forever, if she wants to expand it, she would lack the creditability for
fund-raising, without the issuance of shares to stockholders, she will lack the capital to expand
her legacy even further. Partnership and corporation form of business organization allows her to
have not only fund but also support from resources from stockholders or partnership
agreements. In summary, I think Natalie should choose proprietorship as her form of business
organization as it can benefit her with small scale, however, if she wants to expand, further
consideration towards partnership and corporation should be thoroughly examined.

(b) Will Natalie need accounting information? If yes, what information will she need and
why? How often will she need this information?

Just llike any other business, accounting information always needs to be constantly recorded
and examined for errors to see how the business is operating as well as revealing what is wrong
and what is needed to be fixed. The most fundamental and important information is her P&L
statement, specifically, revenues, expenses, COGS, to calculate if the business is making or
losing money from its core operation. She needs to keep track of her current assets to look for
credit opportunity to borrow money from the bank if she wishes to expand her business.
Liabilities and cash flow should be carefully considered and managed to make sure the debts do
not go out of control which could lead to bankruptcy. This accounting information should be
recorded carefully and summarized monthly to have more insights on what is going on with her
business.

(c) Identify specific asset, liability, and owner’s equity accounts that Cookie Creations will
likely use to record its business transactions.

Cookie Creations will record its business transactions just like any other firms, the accounting
information will be recorded like the followings. For all assets and liabilities, they are recorded
on a balance sheet. All expenses and earnings will be recorded into an income statement.
Furthermore, she should use cash flow statement to record the company's cash transactions
(the inflows and outflows) during the given period, showing all the revenues booked on the
income statement which have been collected. In the end, Cookie Creations should use the
combination of balance sheet, cash flow statement as well as income statement to keep track of
the current business state.

(d) Should Natalie open a separate bank account for the business? Why or why not?

In my opinion, Natalie should open a separate bank accounting serving only for the business to
separate her own personal balance, and the actual money from the business. Because if her
own money made elsewhere were to be put in the same account as the assets from her
business then it could cloud the actual number on her business asset, it could cloud her
understanding on the current state of her assets on the business. Furthermore, if she were to
seek for investments, going through the due diligence process, investors would be fooled by the
actual value of her business assets, which can be considered as fraud. With separated account,
she will have easy control on the cash balance, asset, bank credit and debit, liabilities.