Accountancy- II VIVA Questions and Answers 2023-2024

Depreciation

• Depreciation is the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors.
• Causes of depreciation include physical deterioration, functional obsolescence, and external factors such as changes in market conditions.

Capital

• Capital refers to the owner's investment in a business, representing the business's net worth.

Balance Sheet

• A balance sheet is prepared to provide a snapshot of a company's financial position at a specific point in time.
• The balance sheet presents the company's assets, liabilities, and equity in a structured format.

Need for Depreciation

• Depreciation is necessary to accurately reflect the decreasing value of assets over time, ensuring that financial statements accurately represent the company's financial position.

Non-Trading Concern

• A non-trading concern is an organization that does not engage in profit-oriented activities, such as a club or charity.

Income and Expenditure Account

• An income and expenditure account is prepared to record and classify revenues and expenses of a non-trading concern.
• The purpose of this account is to provide a clear picture of the organization's financial performance over a specific period.

Subscription

• A subscription refers to a regular payment made by members of a non-trading concern, such as a club or charity, to support its activities.

Retirement of a Partner

• The retirement of a partner in a business occurs when one partner leaves the partnership, and their share of the business is taken over by the remaining partners.

Admission of a Partner

• The admission of a partner in a partnership business refers to the inclusion of a new partner into the existing partnership.

Private Company

• A private company is characterized by limited liability, and its ownership is restricted to its members.

Goodwill

• Goodwill in business represents the excess value of a business over its net tangible assets, often resulting from factors like reputation, customer loyalty, and brand recognition.

Hire Purchase System

• A hire purchase system is a financing arrangement where a buyer pays for a product in installments, taking possession of the product while making payments.