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Difference between Receipt and Payment Account and Income and Expenditure Account

Liquid ratio.

Cash Flow Statement : 

A Cash Flow Statement is a Statement Showing Inflow and Outflow of Cash and Cash Equivalents from Operating , Investing and Financing Activities of a Company during a Specific Period. It indicates the Sources from which Cash is Generated and also the Uses to which Cash is Put In .

Preparation of Cash Flow Statement : 

It should be prepared and reported by the Indian enterprises as per AS-3 (Revised) issued by the Institute of Chartered Accountants of India. 

Main Objectives of Preparing Cash Flow Statement : 

(i) To Ascertain the Sources (Receipts) of Cash and Cash Equivalents from Operating, Investing and Financing Activities of the Enterprise . 

(ii) To Ascertain the Applications (Payments) of Cash and Cash Equivalents Under Operating, Investing and Financing Activities of the Enterprise .

(iii) To Ascertain the Net Change in Cash and Cash Equivalents i.e. The Difference between Sources and Applications, Under the Three Activities between the the Dates of Two Consecutive Balance Sheets. 

(iv) To Highlight the Major Activities that have Provided Cash and that have Used Cash During a Particular Period and to Show Their Effect on the Overall Cash Balance . 

Two objectives of financial statement: 

1. To present a true and fair view of the financial performance, i.e., profit/loss of the business 

2. To provide information about cash flows

A fire insurance policy cannot be assigned (i.e. the legal rights or liability of the contract cannot be transferred to any other third party/ individual apart from the ones who had initially entered the contract) without the permission of the insurer because the insured must have insurable interest in the property at the time of contract as well as at the time of loss.

(a) Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease. This is not applicable for accidental injury claims. As only uncertainty is covered not which have probability. 

(b) No, it is under Overseas Mediclaim policy.

The important methods of valuation of good will are as follows 

(a) Average profit methods 

(b) Super profit method or any other method

Both A and C are correct

a. Assorted service 

c. Self-service. 

Reserves and surplus – Equities and liabilities head.

(a) Under first year policy, any claim during the first 30 days from date of cover, for sickness / disease. This is not applicable for accidental injury claims. As only uncertainity is covered not which have probability.

(b) No, it is under Overseas Mediclaim policy

True. General reserve is transferred to continuing partners capital account.

Endowment Fund : Funds providing Permanent means of Support are known as Endowment Fund. In the words of Eric L. Kohler, "It is a Fund, Arising from a Request or Gift, the Income of which is Devoted for a Specific Purpose". Therefore, it is a Capital Receipt, because the Fund Provides Permanent Source of Income. It should be Capitalised and Shown at the Liabilities Side. It is shown at the Debit Side of Receipt and Payments Account.

1. National Insurance Company Ltd. 

2. New India Assurance Company Limited 

3. Oriental Insurance Company Ltd 

4. United India Insurance Company Ltd

Theft is the unlawful taking of property of another: the term includes such crimes as burglary, larceny and robbery.

Burglary is a theft committed by breaking into or out of the premises. Evidence of breaking in, is necessary.

DRR – Debenture redemption reserve.

Insurance Contracts are different from General Contracts. While general contracts work on the principle of „simple good faith‟ insurance contracts work on the principle of „utmost good faith‟. 

The principle of utmost good faith is also known as principle of Uberrima Fides‟. 

a. In an insurance contract the seller is the Insurer and the buyer is the insured. In this case the buyer or the insured has the full knowledge of the property being insured and the seller is ignorant about it. This is a situation which is opposite of a general purchase contract. In a general purchase contract it is the seller who would have full knowledge and details of the property and not the buyer.

b. Insurance is an intangible product. It cannot be seen or felt. It is simply a promise on the part of the Insurer to make good the loss incurred by the insured if and when it occurs.

Under Section 62 (1) (b) of the Companies Act, 2013, a Company may Offer Shares to its Employees under a Scheme of "Employee Stock Option" by Passing a Special Resolution at the General Meeting of the Company . Employee Stock Option means the Option (Right and Not an Obligation) given to the Whole Time Directors, Officers and Employees Right to Purchase or Subscribe at a Future Date, the Securities Offered by the Company at a Pre Determined Price, which Usually is Lower than the Market Price .

Hull, Cargo, Freight, and Liability

At the Time of Admission, the New Partner brings His Share of Goodwill and Capital. Old Partners Sacrifice a Share of their Profits in His Favour and Thus He Gets a Share in the Future Profits of the Firm . 

Following Adjustments are needed at the Time of the Admission of a New Partner. 

(i) Calculation of New Profit Sharing Ratio. 

(ii) Accounting Treatment of Goodwill. 

(iii) Accounting Treatment for Revaluation of Assets and Liabilities. 

(iv) Accounting Treatment of Reserves and Accumulated Profits. 

(v) Adjustment of Capitals on the Basis of New Profit Sharing Ratio . 

Risk under marine insurance are: 

a. Hull Insurance 

b. Cargo Insurance

c. Freight Insurance 

d. Liability Insurance

1) The property should be exposed to maritime peril 

2) The loss should occur consequent to Maritime Adventure

Proposed Dividend is the Dividend to be Distributed among the Shareholders of the Company during a Financial Year, which will be Paid in the Next Year . The Final Dividend is Proposed by the Directors of the Company only when the Final Accounts are Finalized.

This Ratio measures the Ability of the Firm to meet its Long Term Liabilties. It Indicates the Funds Provided by Long Term Lenders in Comparison to the Funds Provided by the Owners, i.e. Shareholders

Debt Equity Ratio = Deb/Equity = Long Term Debts/Shareholder's Funds

Correct answer is (b) Owners

Financial Analysis Help the Interested Parties to make an Assessment of the Earning Capacity and Financial Soundness of a Business Enterprise. But such Analysis has its Own Limitations. Such Limitations should be kept in mind while using the information provided by the Financial Analysis . 

Some of the Limitations of Analysis of Financial Statement are : 

(i) Difficulty in Forecasting. 

(ii) Lack of Qualitative Analysis. 

(iii) Affected by Window Dressing. 

(iv) Different Accounting Policies .

(v) Do Not Reflect Changes in Price Level . 

(vi) Effect of Personal Ability and Bias of the Analyst . 

(vii) Limited Use of Single Year's Analysis of Financial Statements . 

Organizational behavior (OB) is the academic study of how people act within groups. Its principles are applied primarily in attempts to make businesses operate more effectively.

Clapping always involves both the hands or since when the society has a lot of expectations force the entrepreneur, the society must reciprocal him in the same vein by being sensitive to the aspirations of an entrepreneur by means of extending into whole-heartedly support to him in the development of his venture. Both the sides being conscious to their mutual responsibilities to each other similarly the society, too, owes some responsibilities to the entrepreneur by taking into consideration the following factors :- 

1. An employee of an organisation ought to work in a manner that the organizational interest be safeguarded. One must be careful and concerned with not only his benefit rather of the company, too. He must refrain from unnecessary obstinacy, gherao, stop work etc. 

2. It is also true that the customer is the ruler of the market and an entrepreneur has a lot of responsibilities towards him but the ruling customer rather them being a deterrent and contradictory to the prestige, social status and certain compulsions, should adopt a co-operative stand towards the entrepreneur. 

3. It is the responsibilities of the suppliers to ensure the timely supply of raw materials, products equipments etc. in genuine quantity, at right price and well in time. If some item is found defective they must be ready to take it back. 

4. It is responsibilities of the financial agencies or other financiers to provide him finance at the minimum rate of interest and the finance should also be provided sufficiently to contribute generously for the development of his business.

5. The government should also see to it that no policy, such as should prove to be detrimental in the development of the entrepreneur is business because it is the entrepreneur who is an angle of development. 

6. Even the local people of the project ought to adopt a co-operative attitude towards the entrepreneur. They should also understand that if any project is set up in their area, it will yield them a long term benefit.

Following are the Methods of Calculating Goodwill : 

(i) Average Profit Method 

(ii) Super Profit Method 

(iii) Capitalization Method

1. Brand & Branding:- The manufactures or products use a trademarks in order to give a distinct identity to their products, which is known as “Brand”.Brand refers to the product name or any word, a sign, a letter, a design sign etc. 

2. Labeling:- labeling refers to such a piece of paper or a seal by the help of which the important informations pertaining to a product are given, label is a manifestation of packaging or on a box packaging or on a bag, these pertinent information are printed or a separate piece of paper is enclosed inside the pack. 

3. Trademark:- To a layman brand and trademark are like two sides of a coin, without any distinction, but if it is meticulously studied, the difference become conspicuous. Trademark is a brand , which preserves its legitimate reserved right. When a brand is got registered by government, it becomes a trademark. 

4. Packaging:- In the modern age the importance of packaging is gradually increasing day-by-day. On the other hand, packaging provides safety and security to the product. In common term, packaging refers to a thing that contains a product inside or wrapped around, with its brand or name printed on the package.

Revaluation of Assets and Liabilities is done with the Help of a New Account, Called "Revaluation Account". Sometimes this Account is called as "Profit and Loss Adjustment Account". This Account is a Nominal Account in Nature. Therefore, if there is a Loss due to Revaluation, Revaluation Account is Debited and if the Revaluation Results in a Profit, the Revaluation Account is Credited. 

When a Transaction Does Not Involve, Either Inflow or Outflow of Cash, the Item is Called Non-Cash Item. E.g. , Depreciation, It Does Not Reduce Cash.

The smallest individual units in a program are known as tokens. 

Output stream is a sequence of characters from the program to an output device like a monitor or printer.

Calculation of the Total Amount Due to the Representatives of the Deceased Partners : On the Death of a Partner, Accounts in the Books of the Firm are Maintained in the Same Way as on the Retirement of a Partner. Thus the Legal Representatives of the Deceased Partner are Entitled to Claim the following Amounts, which are Credited to His Capital Account. 

(i) The Amount Standing to the Credit of His Capital Account. 

(ii) His Share of the Increase in the Value of Goodwill of the Firm. 

(iii) Interest on Capital, if Provided in the Partnership Deed. 

(iv) His Share of Profit on the Revaluation of Assets and Liabilities. 

(v) His Share of the Undistributed Profits or Reserves. 

(vi) His Share of Profit up to the Date of His Death.

The following Amounts will be Debited to the Account of the Deceased Partner for Ascertaining the Amount Due to His Legal Representatives. 

(i) Drawings and Interest on Drawings. 

(ii) His Share of Loss on the Revaluation of Assets and Liabilities. 

(iii) His Share of Undistributed Loss, Such as Debit Balance of Profit and Loss Account. 

(iv) His Share of the Reduction in the Value of Goodwill . 

Distinction between Sacrificing Ratio and Gaining Ratio

The other name of the ‘if-else’ statement is two-way branching. 

Voluntary Organisations formed to promote certain Cultural, Recreational, Religious, Political, Educational, Medical and Professional Activities are known as Non-Profit or Non-Business Organisations or Non-Profit Entity or Not-For-Profit Organisations. These Organisations are formed with Service Motive. 

Examples of such organisations are as under :

• Delhi Public Library 
• Mohammedan Sports Club
• Delhi University Students Union 
• Free Aid Medical Society. 
• The Institute of Chartered Accountants of India 
• The Institute of Cost and Works Accountant of India

Total Capital of the Company is Divided into Units of Small Denominations. Each such Unit is called "Share". E.g. If the Total Capital of the Company is Rs 10,00,000, Divided into 1,00,000 Units of  Rs 10 each, then each Unit of  Rs 10 will be called a Share of  Rs 10 each. Under Section 43 of the Companies Act, 2013, a Company may Issue TWO Types of Shares :

(i) Preference Shares 

(ii) Equity Shares 

A statement of affairs is a statement showing the balances of assets and liabilities on a particular date. This method of ascertaining profit is also called a statement of affairs method or networth method or capital comparison method.

A user-defined function is a self-contained block of statements, that performs a specific task, with a name given to it, defined by the user in a program.

(a) Capital in the beginning of the year

Goodwill is the Value of the Reputation of a Firm, which Enables it to Earn Higher Profits in Comparison to the Normal Profits, Earned by Other Firms in the Same Trade. "The Term Goodwill is Generally Used to Denote the Benefit Arising from Connections and Reputation" .

Font dialog box contains the tool buttons like font name, font size, font bold, etc.,

The correct answer is : (c) Capital 

Circumstances for Dissolution of a Firm : 

(i) Compulsory Dissolution (Sec.41): A Firm is Compulsory Dissolved in the following cases 

(a) When All or But One Partner of the Firm becomes Insolvent . 

(b) When Business of the Firm Becomes Unlawful . 

(ii) Happening of an Event (Sec. 42): A Firm may be Dissolved on the Happening of Any ONE of the following Incidents : 

(a) On the Insolvency of a Partner. 

(b) On the Fulfilment of the Object for which the Firm was Formed. 

(c) On the Expiry of the Period for which the Firm was Formed . 

Characteristics of a Company : 

(i) Perpetual Existence: The Existence of a Company is Not Affected by the Retirement, Death, Lunacy and Insolvency of its Members . Shareholders may Come and Shareholders may Go, but the Company Goes On For Ever, Unless Wound Up according to Companies Act. 

(ii) Common Seal : Since the Company has No Physical Existence, it must Act through its Agents, called Directors. All Documents Prepared by the Directors must have the Seal of the Company. The Common Seal Acts as the Official Signature of the Company.

The auto-fill option can be used to insert a series of values in a range of cells easily.

The expansion of IBM is “International Business Machine”. The earlier name of IBM was Tabulating Machine Company.