InterviewSolution
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InterviewSolution
This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 551. |
What does a low properitary ratio mean? |
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| 552. |
What do youunderstandby 'Direct Expenses? |
| Answer» Solution :Direct Expenses are those expenses which are part of the Cost of GOODS Sold, i.e., expenses are INCURRED for making the goods READY for SALE. | |
| 553. |
What does aBearer Debenture mean? |
| Answer» SOLUTION :BEARER Debentures are those debentures which are payable to the bearer thereof. These debentures are transferable by mere DELIVERY. | |
| 554. |
What do you understand by Cash Equivalents? |
| Answer» SOLUTION :Cash Equivalents are short-term HIGHLY liquid investments that are readily convertible into known amount of cash and which are subject to INSIGNIFICANT RISK of CHANGES in value. | |
| 555. |
What do you understand by admission of a new partner? |
| Answer» Solution :When a new partner is admitted into the firm, it is known as ADMISSION of a new partner. On admission of a new partner, old PARTNERSHIP comes to an END and new partnership comes into EXISTENCE. | |
| 556. |
What do you understand by accounting Ratio? |
| Answer» | |
| 557. |
What do you mean by the term ratio? Can a single ratio tell us something significatn? |
| Answer» | |
| 558. |
What do you mean by Redeemable Preference Shares ? |
| Answer» Solution :Such shares are those, the CAPITAL of which will be REPAID by the Company within a STIPULATED PERIOD in accordance with the terms of issue. | |
| 559. |
What do you mean by Participating Preference Shares ? |
| Answer» SOLUTION :Such shares, in addition to the fixed preference dividend, CARRY a right to participate in the SURPLUS profits, if any, after dividend at a stipulated rate has been PAID to equity SHAREHOLDERS. | |
| 560. |
What do you mean by Non-Convertible Preference Shares ? |
| Answer» SOLUTION :When the holders of preference shares have not been conferred the right of GETTING their preference shares converted into equity shares, such shares are CALLED non-convertible preference shares. | |
| 561. |
What do you mean by Non-Participating Preference Shares ? |
| Answer» Solution :Such shares get only a FIXED rate of DIVIDEND EVERY year and do not carry a right to PARTICIPATE in the surplus profits or in any surplus on WINDING up. | |
| 562. |
What do you mean by Non-Redeemable Preference Shares ? |
| Answer» Solution :Non-redeemable or Irredeemable PREFERENCE shares are those, the capital of which cannot be REFUNDED before WINDING up. | |
| 563. |
What do you mean by Non-Cumulative Preference Shares ? |
| Answer» Solution :The holders of such shares GET a fixed amount of dividend out of the profits of each year. If no dividend is declared in any year due to any REASON, such shareholders get NOTHING, nor can they CLAIM unpaired dividend of any year in any subsequent year. | |
| 564. |
What do you mean by Cumulative Preference Shares ? |
| Answer» Solution :Cumulative PREFERENCE shares are those preference shares, the holders of which are ENTITLED to RECOVER the arrears of preference dividend, before any dividend is paid on equity shares. This MEANS that if in any year, the profits of the company are insufficient to pay dividend on these shares, the dividend keeps on accumulating until it is fully paid. | |
| 565. |
What do you mean by Convertible Preference Shares ? |
| Answer» SOLUTION :Holders of these shares have a RIGHT to get their preference shares converted into equity shares at their OPTION ACCORDING to the terms of ISSUE. | |
| 566. |
What do you mean by an insolvent ? |
| Answer» SOLUTION :Insolvent is a person is or FIRM ,who is unable to PAY his/its debts in FULL | |
| 567. |
What do you mean by accounting ratio? How are they useful? |
| Answer» | |
| 568. |
What can be the reasons for a firm earning higher Gross Profit than the industry standards ? |
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Answer» Solution :The resons can be (i) Better sales REALISATIONS (ii) Lower COST a PURCHASE (iii) Efficientproduction leading to lower cost a production , and (IV) CLOSING Stock is overvalued . |
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| 569. |
What bad position of the business is tried to be depicted as good, it is known as …………………… |
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Answer» PERSONAL Basis |
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| 570. |
What are two major inflows and outflows of cash from financing activities? |
| Answer» Solution :INFLOWS of Cash: (i) ISSUE of shares for cash and (II) Issue of DEBENTURES for cash. OUTFLOWS of Cash: (i) Redemption of debentures and (ii) Dividend paid. | |
| 571. |
What are Trade Investments? |
| Answer» Solution :TRADE investments are investments made by a company in the SHARES or debentures of ANOTHER company for the PURPOSE of promoting its own trade or business. | |
| 572. |
What are the various ratios used for establishing profitability and financial position of an enterprise? |
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Answer» Solution :Accounting ratios that are USED as a TOOL are: (i)Liquidity Ratios: Current RATIO and Quick Ratio. (ii) Solvency Ratios: Debt to Equity Ratio, Proprietary Ratio, Total Assets to Debt Ratio and Interest Coverage Ratio. (iii)Activity Ratios:Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio, Working Capital Turnover Ratio and Inventory Turnover Ratio. (iv)Profitability Ratios: Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, NET Profit Ratio and Earning Per Share. |
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| 573. |
What are the various types of ratios? |
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| 574. |
What are the two types of shares which a company can issue? |
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Answer» SOLUTION :The TYPES of SHARES which a COMPANY can ISSUE are: (i) Preference Shares, and (ii) Equity Shares. |
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| 575. |
What are the two types of shares which a company can issue ? |
| Answer» SOLUTION :(i) PREFERENCE SHARES, and (II) EQUITY Shares. | |
| 576. |
What are the two effects of Forfeiture of Shares? |
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Answer» Solution :(i) The name of the defaulting shareholder is removed from the registerof members. It means he is no LONGER a shareholder of the COMPANY. (ii) The amount already paid by the defaultingshareholder is forfeited and such amount is transferred to FORFEITEDSHARES ACCOUNT. |
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| 577. |
What are theprovisions regarding Debentures Redemption Investment? |
| Answer» Solution :A company required to create DEBENTURES Redemption Reserve (DRR) is also required toinvest in specified securities on or before 30TH APRIL of this year at least 15% of thenominal (face) value of THEDEBENTURES to be redeemed by 31ST March of next year. | |
| 578. |
What are the major heads in the Equity and Liabilities part of the Balance Sheet as per Schedule III? |
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Answer» (II) SHARE Application MONEY Pending Allotment; (III) Non-CURRENT Liabilities; (iv) Current Liabilities. |
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| 579. |
What are the items that are considered to compute Change in Inventories? |
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Answer» |
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| 580. |
What are the financial statements prepared in the final accounts of Not-For-Profit Organisations? |
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Answer» SOLUTION : FINAL accounts of Not-For-Profit Organisations contain the FOLLOWING STATEMENTS: (i) Receipts and Payments Account, (ii) Income and Expenditure Account and, (III) Balance Sheet. |
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| 581. |
What are the essential features of the Receipts and Payments Account? |
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Answer» |
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| 582. |
What are the amin objects of computation of accounting ratio? |
| Answer» | |
| 583. |
What are Registered Debentures? |
| Answer» SOLUTION :Registered Debentures are those debentures which are payable to the PERSONS whose NAMES appear in the Register of DEBENTUREHOLDERS. | |
| 584. |
What are Quick Assets? |
| Answer» Solution : QUICK ASSETS are Current Assets less Inventories and Prepaid Expenses | |
| 585. |
What are Prepaid Expenses? |
| Answer» SOLUTION : PREPAID EXPENSES are the expenses which have been PAID in ADVANCE. | |
| 586. |
What are preliminary expenses? |
| Answer» SOLUTION :Preliminary EXPENSES are those expenses which are INCURRED for INCORPORATION of a company. | |
| 587. |
What are preliminary expenses ? |
| Answer» SOLUTION :These are the EXPENSES INCURRED prior to the INCORPORATION of a company. | |
| 588. |
What are Preference Shares? |
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Answer» Solution :Preference Shares are those shares which carry following two RIGHTS in preference to Equity Shares: (i) as regards dividend, they have preferential right of dividend to be paid as FIXED amount or an amount CALCULATED at a fixed rate, which may EITHER be free of or subject to income tax, and (ii) as regards capital, in the event of winding up, they have preferential right to be repaid the capital before it is repaid to Equity Shareholders. |
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| 589. |
What are preference Shares ? |
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Answer» Solution :Preference SHARES are those which CARRY the FOLLOWING two RIGHTS : (i) They have a right to receive dividend at a fixed RATE before any dividend is paid on the equity shares. (ii) When the company is wound up, they have a right to the return of capital before that of equity shares. |
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| 590. |
What are Financial Statements ? |
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Answer» Solution :Financial Statement refer to statements prepared at the end of the accounting period. These statements are: (i) Income Statement, i.e., Statement of Profit and Loss, (ii) Position Statement, i.e., Balance Sheet, and (iii) CASH Flow Statement. Note: Section 2(40) of the Companies Act, 2013 specifically INCLUDES Cash Flow Statement as part of Financial Statements. But following companies may not include Cash Flow Statement in their Financial Statement: (a) One person Company,(b) SMALL company and,(c ) DORMANT company. |
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| 591. |
What are equity shares ? |
| Answer» Solution :EQUITY shares are those which are PAID dividends only when PROFITS are left after payment of fixed rate of dividend to preference shares. In other words, there will be no fixed rate of dividend on these shares. When the COMPANY is WOUND up, their capital is returned only when preference share capital is returned in full. | |
| 592. |
What are Equity Shares? |
| Answer» SOLUTION :EQUITY SHARES are those shares in a COMPANY which are not PREFERENCE Shares. | |
| 593. |
What are calls in Arrears ? |
| Answer» Solution :Calls-in-arrears refers to the amount which has not beenpaid by the SHAREHOLDER on allotment or calls made by the Company TILL the last day FIXED for the PAYMENT therefore. | |
| 594. |
What amount will be credited to the lncome and Expenditure Account for the year ending 31 st March, 2010 on the basis of the following information? : {:("","31-3-2009","31-3-2010"),("Outstanding Subscription"," 10,000"," 25,000"),("Advance Subscription"," 3,000"," 2,000"):} Subscriptions received during the year 2009-10 were Rs 4,00,000. |
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Answer» RS 3,84,000 |
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| 595. |
What ajustments are required at the time of reconstitution of a partnership firm? |
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Answer» Solution :FOLLWING ADJUSTMENTS are required at the time of reconstitution of a PARTNERSHIP firm : (i) Determination of Sacrificing Ration and Gaining Ratio (II) Accounting for Goodwill. (iii) Accounting Treatment of Reserves and Accumulated Profits (iv) Accounting for Revaluation of Assets and Liabilities. (v) Adjustment of Capitals. |
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| 596. |
Weighted average method of calculating goodwillis used when: |
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Answer» PROFITS are not equal |
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| 597. |
Weighted Average Profit Method of calculating goodwill is used when |
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Answer» PROFITS are not equal. |
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| 598. |
Wages paid to a worker for making additions to machinery amounting to Wages Account. Identify the type of error. |
| Answer» SOLUTION :ERROR of PRINCIPLE | |
| 599. |
Wages paid to workers is shown in the Statement of Profit and Loss under: |
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Answer» COST of Materials CONSUMED, |
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| 600. |
Was the bank balance reconciled? |
| Answer» SOLUTION :Yes, it was reconciled and the balance as per books and bank STATEMENT MATCHED. | |