Concept And Meaning Of Stock Market / Accounting-Management

The securities once issued in major market end up being the part of secondary market. It offers an accepted place or system for energetic trading of securities among traders themselves. The stock market is a secondary market, which aids to the liquidity of securities traded there on. When investors have to buy securities in the secondary market, they need to contact the securities brokers for opening the take into account purchase of securities.

After the accounts has been opened, the securities broker conveys the order of the investor to the securities sellers who manage the inventory of securities. There are two basic types of stock marketplaces- organized stock exchange and over-the-counter market. Organized stock market will be the physical locations where securities are exchanged under some set up rules and legislation through the license associates of the exchange.

It is one of the key secondary markets, where in fact the investors buy and sell the securities between themselves. Organized stock exchanges assist in the trading of securities, that are listed in it. This means the securities, that are not listed, aren’t traded in an organized stock exchange. There are many structured stock exchanges round the world.

One of the best known is New York STOCK MARKET (NYSE), which deals with the trading greater than 50% of the quantity of total shares traded in United States. Other well-known exchanges are London Stock Exchange, Tokyo STOCK MARKET, Hong Kong Stock Exchange. There can be several stock exchanges in a nationwide country, for example, Bombay STOCK MARKET, Delhi STOCK MARKET, Calcutta Stock exchange in India. Over-the-counter (OTC) market was traditionally concerned with the trading of securities that have been not listed in an organized stock market. However, today the securities listed in an organized stock market are traded in the OTC market as well.

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OTC market is an informal type of market for securities where no compulsory report on securities is required. Any security can be exchanged on the OTC market as long as a registered dealer is willing to produce a market in the security (ready to buy and sell the security). It isn’t a central physical place as an organized stock exchange, rather it’s the network of agents and sellers spread over the nationwide country. OTC market to their clients. The agents and dealers in OTC market can contend with both investment bankers and the organized exchanges because they can operate in both major and supplementary market.

Now that we’ve developed our dual entry bookkeeping framework, let’s develop a table and an easy method for applying the debit and credit rules that we just developed. Determine the types of accounts the transactions affect-asset, responsibility, revenue, or expense account. Determine if the transaction raises or decreases the account’s balance.

Apply the debit and credit rules based on the kind of account and if the balance of the account to increase or decrease. Notice that in our desk that sometimes the Left Column is used to record an increase to a merchant account and in other situations it’s used to record a lower to an account.