Difference between Stock & Flow
Basis Stock
1. Meaning It refers to that variable which
is measured at a particular
point of time.
2. Time Stock is not time dimensional
Dimension as it is measured at a particular
point of time.
3. Nature It is a static concept.
4.Examples eg. wealth, distance of Delhi to
noida, stock of water in a tank,
bank deposits, capital,
population on a particular date
etc.
Flow
It refers to that variable which is measured
at a particular period of time.
Flow is time dimensional as measured only
for a particular period of time.
It is a dynamic concept.
e.g. pocket allowances, speed of a car
travelling Delhi to Noida, flow of water
from tank, demand, supply, consumption
exp., savings, profit or loss, national
income, production, GDP, Investment etc
 Difference between final goods & Intermediate goods
Basis Final Goods Intermediate Goods
1.Meaning These are those goods which These are those goods which are
are ready to use by their not ready to use by their final
final user. user.
2. Purpose Purpose of these goods are These are used in the process of
for consumption and production as a raw material and
investment. for resale purpose
3. Nature They are include in both They are NOT include in both
domestic and national domestic and national income.
income.
 Basis Final Goods Intermediate Goods
4. Value There is no value addition Some value has to be added in
addition in final goods as they are intermediate goods as they are
ready for use. not ready for use.
5. They have crossed the These are with in the production
Production production boundary. boundary.
boundary
6. Example Milk purchase by Milk purchased by a biscuit
household for company is a raw material, milk
consumption, machinery purchased by a dairy shop is for
purchased as an resale.
investment.
 Difference between Depreciation and Capital Loss
Basis Depreciation
1. Meaning It refers to fall in the value
of fixed assets due to
normal wear and tear,
passage of time or
expected obsolescence
2. Provision Provision is made for
for loss replacement of assets as it
is an expected loss.
3. Production It does not hamper the
process production process.
Capital Loss
It refers to loss in value of
the fixed assets due to
unforeseen obsolescence,
natural calamities, thefts,
accidents, etc.
No such provisions is made
in case of capital loss as it is
an unexpected loss.
It hampers the production
process.
 Difference between Real GDP & Nominal GDP
Real GDP Nominal GDP
When GDP is measured at the base or When GDP is measured at the current
constant year prices it is called Real year prices it is called Nominal GDP.
GDP.
The Value of Total Product is low The Value of Total Product is High
Because Because
Real GDP is the inflation-adjusted Nominal GDP is the Gross Domestic
GDP of a country. Product without any effect of
inflation.
It is true indicator of economic growth It is not a true indicator of economic
and welfare. growth and welfare
Real GDP is better & More Reliable than Nominal GDP
 Difference between Direct and Indirect Tax

Basis Direct Tax Indirect Tax

Final Burden The burden of direct tax falls on Indirect taxes are those which are
the person who makes the
payment of the government.
Shifting of Tax Direct taxes cannot be shifted.
Progressiveness Direct taxes are generally
progressive. Their real burden is
more on the rich.
Example Income tax, Corporate profit tax
paid to the govt. by one person but
their burden is borne by another
persons.
Indirect taxes can be shifted to other
persons.
Indirect taxes are generally
regressive. Their real burden is more
on the poor.
Sales tax, Vat, (Value added tax),
 Difference between Revenue Receipts & Capital Receipts
Basis Revenue Receipts Capital Receipts
Meaning These are those receipts of the These are those receipts of the
government which don’t leads to government which leads to
reduction in any assets nor reduction in any assets or creation
creation of any liabilities of any liabilities
Nature These are recurring in nature. These are non recurring in nature.
Debt Revenue receipts are not debt Some capital receipts like
Creation creating borrowing are debt creating
Examples Tax receipts, fees, fines, interest, Recovery of loans, disinvestments
penalties, etc. (PSU) & borrowings.

Formula: Total Receipts = Revenue receipts + Capital receipts

 Difference between Revenue Expenditure & Capital Expenditure
Basis Revenue Expenditure Capital Expenditure
Meaning These are those expenditure of These are those expenditures of
the government which don’t the government which leads to
leads to creation of any assets creation of any assets or reduction
nor reduction of any liabilities. of any liabilities.
Nature These are recurring in nature. These are non recurring in nature.
Purpose These are incurred on normal These are incurred on acquisition
functioning of the government. of assets and granting loans
Examples Interest, subsidies, expense on Acquisition of machinery,
collection of taxes, donation, construction of school, hospital,
pensions, etc building, repaid loans, etc.
Formula: Total expenditure = Revenue expenditure + Capital expenditure
Difference between Devaluation and Depreciation of domestic currency.
Basis Devaluation Depreciation
Meaning It refers to fall in price of It refers to fall in price of
domestic currency under domestic currency under
fixed exchange rate system flexible exchange rate
system.
Control It is under the control of It is under the control of
Government. market forces of demand
and supply
Exchange rate It was in fixed exchange It is in flexible exchange rate
system rate system. system

SUNIL PANDA COMMERCE CLASSES

 Difference between Appreciation and Revaluation of Domestic Currency

Basis Appreciation of Domestic Currency Revaluation of Domestic Currency

Meaning Increase in the value of domestic Rise in the value of domestic currency
currency in terms of foreign by the Govt.
currency by market demand and
supply.
Operation Takes place due to market force of Takes place due to the Govt. Order to
demand and supply of foreign correct BOP situation
exchange
System Flexible exchange rate system Fixed exchange rate system
 Difference Between Autonomous and Accommodating Transactions
AUTONOMOUS TRANSACTION ACCOMMODATING TRANSACTIONS
Autonomous items refers to those Accommodating items refer to those
international Transactions which occur transaction which take place to cover
due to some economics motive such as deficit or surplus in autonomous
profit maximization eg. Import of transactions. e.g. withdrawal from foreign
machinery from Japan, FDI, etc. exchange reserve, loan from IMF, etc. to
maintain BOP
These items are independent in nature These items are dependent in nature
These item take place on both current and These item take place only on capital
capital account account
These items are also known as above the These items are also known as below the
line items as they are recorded as first line items, as they are recorded as
item before calculating deficit or surplus secondary item after calculating deficit or
in BOP surplus in BOP
 Difference between BOT and BOP
Basis Balance of Trade (BOT)
Nature of Transactions concerning trade of
transactions goods only are recorded.
Capital Transactions of capital nature are
transactions not included in Balance of Trade.
Mutual Balance of Trade is a part of
relation current account of Balance of
Payment.
Favourable When exports of goods are higher
BOT/BOP than the imports of goods, BOT is
considered as favourable
Balance of Payments (BOP)
All transactions concerning goods,
services and capital transfer are
recorded.
Transactions of capital nature are also
recorded in Balance of Payment.
BOP is much larger as it has current
and capital accounts which include BOP
too.
When net balance of current account
and capital account is in Plus. BOP is
considered as favourable.
 Difference between Physical and Human Capital
Physical Capital Human Capital
Tangible can be sold in the market Intangible, built in the body and mind of its
owner
Can be separated from the owner Inseparable can’t be sold anywhere but
only services can be sold
Mobile between countries if trade Hardly mobile restricted by nationality
restriction followed
Can be built only through imports and It depends on person choice whether
creates only private benefits he/she wants to raise the earnings or not.
It creates both private and social benefits.
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