Explore topic-wise InterviewSolutions in Current Affairs.

Correct option is a) Both A and R are true and R is the correct explanation of A

Correct option is a) Both Assertion (A) and Reason (R) are true.

a) Both Assertion (A) and Reason (R) are true. 

Correct option is c) Both assertion and reason are correct

Correct option is c) A is true , but R is false

c) A is true , but R is false 

1. ii) 0.46

2. iii) ₹ 30,00,000

3. iii) Share Holders funds

c) Both assertion and reason are correct. 

a) Assertion is wrong but Reason is correct. 

Prime cost is the summation of all direct costs relating to production, i.e. direct material, direct labour and direct expenses.

Features are: 

1. Easily and freely transferable 

2. Must be in Writing 

3. Certain Amount 4. Certain time

The basic objective of social audit is to ensure public accountability in the implementation of projects, laws and policies.

Social Audit is the critical stock taking of any programme or scheme by the community with active involvement of the primary stakeholders. It includes audit of the quality of works being executed at different levels along with the details of disbursements made, the number of labourers employed and materials used. The people in coordination with local administration will conduct social audit.

The Principal Secretary, RD/ State Commissioner, MGNREGA and the DPC shall be responsible for (i) monitoring the progress of the certification (ii) taking corrective action (iii) submitting ATRs to concerned authority

• In addition, the Comptroller and Auditor General of India, or any person appointed by him on his behalf, shall conduct audit of the accounts of schemes at such intervals as he may deem fit.
• The accounts of the grantee institution will also be audited by the internal Audit of the Principal Accounts Office of the Ministry.

A CA may be assigned more than one district if adequate number of CAs are not available on the panel in any State/ district.

Preferably one CA is to be be selected and appointed for each district. In case the State Government is of the view that it is not feasible for one CA to certify accounts of all GPs selected in a district, more than one CA may be appointed.

The period of assignment of CAs will be not more than two years. The assignment for the second year will be renewed only upon satisfactory performance in the first year.

• The CA will submit to the PO, a report for each GP visited, enclosing a certificate (in the format at annexure of MGNREGA Operational Guidelines) within 15 days of completion of certification of accounts of the GP. The report should contain the records verified, discrepancies noticed if any, adequacy of documentation and findings on the items listed in the checklist.
• A consolidated summary for all GPs taken up for certification and assigned to the CA within a district, will be submitted to the DPC within 15 days of completion of certification for all such GPs. In the consolidated summary the CA firm will indicate the GPs visited including the dates of the visit. In this report, issues which require immediate attention of the DPC should be highlighted. In addition adverse observations and suggestion for improvement will also be indicated in the report.
• During the course of certification, if the CA notices any defalcation or misappropriation of funds, it shall be immediately brought to the notice of the DPC who would proceed to take necessary action.
• District-wise summary of observations made by CAs will also be included as an annexure to the audit report of the State Employment Guarantee Fund.
• While auditing the MGNREGA funds at the district level, the auditor will take into account the certification and observation of the CAs made on GP accounts.
• The Secretary/ Commissioner, MGNREGA at the State level and the DPCs at the district level would be responsible to ensure that the accounts of selected GPs are certified by the empanelled CAs within a given time-frame.
• DPC will submit to the State Govt. an Action Taken Report (ATR) on the observations of the CA and likewise, the State Government will submit a consolidated ATR to MoRD.
• This certification, observations and the Action taken reports will be examined by the Ministry while releasing funds to the State Government.

(i) Subscription : Subscription is an agreement to be a part of an Association , Club etc. The member has to pay a fixed amount at regular interval to remain as a part of the Club Association. There are two ways of computing Subscription for the Current Accounting Year : 

• Statement Method 
• Account Method

Subscription will be Treated as Liability , if :

• It is of Non-recurring Nature.
• It is Received for Certain Specific Purpose such as :

– Subscription for Tournament Fund 

– Subscription for Governor’s Party 

– Subscription for Building Fund 

– Subscription for Construction of Science Block .

(ii) Life Membership Fees : It is a Capital Receipt , Irregular in Nature received once from the Member throughout His / Her Life. It is Capitalized and Shown at the Liabilities Side . 

(iii) General Donation : General Donation can be classified as :

– General Donation of Big Amount . It is a Donation of Non 

– Recurring Nature. So it should be Capitalized and Shown at the Liabilities Side of the Balance Sheet . 

– General Donation of Small Amount . This Donation is of a Recurring Nature . It is expected that such Donation will be Received every year. It is a Revenue Receipt and it should be treated as Income and Recorded at the Income Side of Income and Expenditure Account .

(iv) Specific Donation : Specific Donations are the ones received for Certain Specific Purpose . It is a Capital Receipt and should be Capitalized and Posted at the Liabilities Side of the Balance Sheet . These Specific Donations may be for Tournament Fund , Construction of Building Hall, Lawn, Pavilion, Library or Governor’s Party etc. 

(v) Legacy : It is the Amount Received from Individuals Received as Per Will . It is a Receipt of Non – Recurring Nature. So it should be Capitalized and Shown on the Liabilities Side . It is shown at the Debit Side of Receipts and Payment Account . It does not matter , whether the Legacy is of Small Amount or Big Amount .

A Cash Flow Statement is a Statement showing Inflows (Receipts) and Outflows (Payments) of Cash during a Particular Period . In other words , it is a Summary of Sources and Application of Cash during a particular span of time . It Analyses the reasons for Changes in the Balance of Cash between the Two Balance Sheet Dates . The term “Cash” here stands for Cash and Cash Equivalents . A Cash Flow Statement includes only those Items which Affect Cash . 

Following are the Limitations of a Cash Flow Statement : 

• Not Suitable for Judging the Liquidity : It does not present True Picture of the Liquidity of a Firm because the Liquidity does not depend upon Cash Alone . Liquidity also depends upon those Assets which can be easily converted into Cash . Exclusion of these Assets observes the True Reporting of the Ability of the Firm to meet its Liabilities when they become Due for Payment . 
• It Ignores Non – Cash Transactions : Cash Flow Statement Ignores Non – Cash Transactions like Purchase of Fixed Assets by Issuing Shares or Debentures , Conversion of Debentures into Shares , Issue of Bonus Shares etc. Hence the true position of an enterprise cannot be judged by Cash Flow Statements .
• It Ignores the Accrual Concept of Accounting : It is prepared on Cash Basis and Hence Ignores one of the Basic Concepts of Accounting , namely Accrual Concept .

Correct option is B) so

Correct option is D) as

Correct option is C) so / that

Correct option is C) as though

(a) I was never helped by them.

(b) For you misdeed will be punished you my them.

(c) Hari has been always helped by me.

Profitability Ratio : The main object of All the Business Concerns is to Earn Profit . Profit is the Measurement of the Efficiency of the Business . Profitability Ratios Measure the Various Aspects of the Profitability of a Company, such as : 

• What is the Rate of Profit on Revenue from Operations ? 

Whether the Profit are Increasing or Decreasing.

Gross Profit Ratio : This Ratio establishes a Relationship between Gross Profit and Revenue from Operations i.e. Net Sales . This Ratio is Computed and Presented in Percentage . Formula for Computing this Ratio is :

Gross Profit Ratio = Gross Profit/Re venue from Operations (i.e. Net Sales) x 100

Significance of Gross Profit Ratio : This Ratio measures the Margin of Profit available on Revenue from Operations. The Higher the Gross Profit Ratio, the Better it is . No Ideal Standard is Fixed for the Ratio , but the Gross Profit Ratio should be Adequate Enough Not only to Cover the Operating Expenses, but also to provide for Depreciation, Interest on Loans, Dividends and Creation of Reserves. 

Operating Profit Ratio : This Ratio shows the Relationship between Operating Profit and Net Revenue from Operations .

Operating Profit Ratio = Operating Profit/Re venue from Operations x 100

Significance of Operating Profit Ratio : This Ratio Measures the Rate of Net Profit Earned on Revenue from Operations . It helps in distinguishing the Overall Efficiency of the Business Operations . An Increase in the Ratio over the Previous Year Shows Improvement in the Overall Efficiency and Profitability of the Business .

(4) All of the above

(a) Great conquerors and generals rangely people are generally appear in history books. 

(b) No, fighting is not to be a mark of civilization. 

(c) Those people who have brought peace and happiness to mankind are truly civilized.Such as prophets, saints, doctors, inventors and diseaverers. 

(d) Those people have always brought peace and happiness. They have been great since instead of inflictiy pain and hardship upon humanity, they have healed their wounds and sared human lives. Thus they deserve our admiration and respect.

(i) TRUE

(ii) FALSE

(a) Today is certain. 

(b) I know 

(c) Walk Cerefully.

If any Shareholder Fails to Pay the Amount Due on Allotment or on Any Call within the Specified Period , the Directors may Cancel the Shares . This is called “Forfeiture of Shares” . The Shares can be Forfeited only if the Articles of Association of the Company allows them to be Forfeited . In order to make the Forfeiture Valid , it is Essential to Follow the Rules Laid Down in the Articles . If No Rules are given in Articles , the Provisions of Table F of Schedule I of the Companies Act , 2013 regarding Forfeiture Apply . The Usual Procedure is that the Defaulting Shareholder must be given a Minimum of 14 Days Notice Requiring Him to Pay the Unpaid Amount on His Shares , together with the Accrued Interest thereon . The Notice must state that , if the Unpaid Interest is Not Paid , within a Certain Period , His Shares shall be Forfeited . If in spite of this Notice , the Shareholder still does not pay the Unpaid Amount on His Shares , His Shares may be Forfeited by a Resolution of the Board of Directors . After the Forfeiture , the Name of the Sharehoder is Removed from the Register of Members. The Amount already Paid by Him Belongs to the Company and is Not Returned to Him and this Amount of the Defaulting Shareholder is Credited to Share Forfeiture Account . Journal Entry for the Forfeiture is passed as :

Share Capital A/c. Dr    (Number of Share Forfeited x Called Up Value Per Share)

To Share Allotment A/c  (Amount Not Received on Allotment)

To Share Call A/c       (Amount Received on Application , Allotment and Calls so far)

Difference Between Not-for-Profit Organization and Trading Organization

Two conditions under which a Partnership Firm is Dissolved are :

•  When All or All , but One Partner of the Firm becomes Insolvent .

•  When Business of the Firm becomes Unlawful .

Since Partnership is the Outcome of an Agreement , it is Essential that there must be some Terms and Conditions Agreed Upon by All the Partners. Such Terms and Conditions may be either Oral or Written . The Law does not make it Compulsory to have a Written Agreement. However, in order to Avoid All Misunderstanding and Disputes , it is always the Best Course to have a Written Agreement Duly Signed and Registered under the Act. Such a Written Document , which contains the Terms of Agreements is called “Partnership Deed”. 

The Essential Clauses of a Partnership Deed are : 

• The Name and Address of the Firm . 
• Name and Addresses of the Partners . 
• The Type and Nature of the Business the Firm Proposes to do . 
• Amount of Capital to be Contributed by Each Partner and Whether the Capital Accounts will be Fixed or Fluctuating .
• Interest on Capital : Whether Interest is to be Allowed on Capitals . If so , The Rate of Interest . 
• Drawings : How much Amount the Partners are Entitled to Withdraw for Personal Use . 
• Interest on Drawings : Whether Interest will be Charged on Partner’s Drawings . If so , the Rate of Interest . 
• Profit Sharing Ratio : The Ratio in which Profits or Losses are to be Divided among Partners 

Distinction between Revaluation Account and Realization Account

A Debenture is Issued by a Company in the form of a Certificate , which is a Written Acknowledgement of Debt taken by the Company 

Two features of a Debenture are : 

• A Debenture is Issued under the Seal of the Company . 
• It contains a Contract for the Repayment of Principal Sum at a Specified Date .

Investing Activities include the Purchase and Sale of Long Term Assets such as, Land, Buildings, Plant and Machinery etc. Not held for Resale. These activities also include the Purchase and Sale of such Investments which are Not Included in Cash Equivalents. Cash Flow from Investing Activities Discloses Expenditure Incurred for Resources intended to generate Future Income and Cash Flows. Examples of Cash Flows from Investing Activities are :

• Cash Payments to Acquire Fixed Assets (Including Intangibles) . 
• Cash Receipts from Sale of Fixed Assets (Including Intangibles) .

Realization Account : A Realization Account is opened for Disposing Off all the Assets of the Firm and making payment to All the Creditors. 

Realization Account is a Nominal Account . The Objective of Preparing Realization Account is : 

• To find out the Profit or Loss on Realization of Assets and Payment of Liabilities . 

Super Profit refers Excess Profit Earned by a Firm in comparison to Normal Profit Earned. Thus, if a Firm has No Excess Profit , it will Not have Goodwill. 

For instance, if a Firm has Invested Rs 1,00,000 and Rate of Return is 8 % on Capital Employed , it has earned Rs 23,000 as Actual Profit during the year.

The Normal Profit Earned is Rs 1,00,000 x 8/100 = 8,000

The Super Profit = Actual Profit – Normal Profit

= Rs 23,000 – Rs 8,000 = Rs 15,000

Financial Statements are the End Products of Accounting Process. They provide information about the Profitability and the Financial Position of a Business. Yet there are few Limitations of such type of Statements as such . 

These Limitations are : 

• Manipulation and Window Dressing . 
• Use of Diverse Procedures . 
• Qualitative Aspect Ignored .

Objectives of preparing Financial Statements are : 

• To present a True and Fair View of the Financial Performance (i.e. Profit / Loss of the Business) . 
• To present a True and Fair View of the Financial Position (i.e. Assets / Equity and Liabilities of the Business) . 
• To Assess the ability of the Business Enterprise to meet its Short Term and Long Term Commitments.

Difference Between Receipts and Payment Account and Income and Expenditure Account.

Contingent Liabilities are the Liabilities which have Not Arisen, but May Arise upon the Happening of a certain event . In other words, the Liability itself is Uncertain . It may or may not involve the payment of money. The amount of Contingent Liability is never shown on the Liabilities Side. These are always Stated in Notes to Accounts before the Balance Sheet . 

Contingent Liabilities can be Classified as :

• Claims against the Company, Not Acknowledged as Debt. 
• Guarantees given by the Company. 
• Other Money for which the Company is Contingently Liable. 

Balance Sheet is the financial statement of a company which includes assets, liabilities, equity capital, total debt, etc. at a point in time. Balance sheet includes assets on one side, and liabilities on the other. Balance Sheet has two main heads –assets and liabilities. 

When Financial Statement figures for two or more years are placed side-by-side to facilitate Comparison, these are called “Comparative Financial Statements”. Such statements provide for columns to indicate the Increase or Decrease in these figures from one year to another in “Absolute Figures” and in “Percentage Form” . 

Objectives of Comparative Financial Statements are :

• To make the Data Simpler and More Understandable : The main aim of preparing Comparative Financial Statements is to put the Data for a number of years in Simpler and Comparable Form .
• To Indicate the Trend : Another aim of Comparative Financial Statements is to indicate the Trend of Change by putting the Figures of Production , Revenue from Operations , Expenses and Profits etc. for a number of years side-by-side . 

Correct answer is d. There is guaranteed allotment if we put bid through NSE platform

Objectives of comparative statements are :

• Compare financial data at two points of time and
• Helps in deriving the meaning and conclusions regarding the changes in financial positions and operating results.

c) Last in first out

LIFO stands for Last in first out.