Podcast
Questions and Answers
What is the term for an issue of shares made by a company to the general public for subscription?
What is the term for an issue of shares made by a company to the general public for subscription?
- Sweat Equity Shares
- Initial Public Offer (correct)
- Private placement of shares
- ESOP
How does the forfeiture of shares affect the capital structure of a company?
How does the forfeiture of shares affect the capital structure of a company?
- Increases Capital Reserve
- Reduces Paid-up Capital (correct)
- Increases Reserve Capital
- Reduces Authorised Capital
Which of the following is typically classified as a current liability when preparing a company's balance sheet?
Which of the following is typically classified as a current liability when preparing a company's balance sheet?
- Debentures
- Public Deposits
- Bonds
- Cash Credit (correct)
Which of the following items are considered sources of cash inflow from investing activities?
Which of the following items are considered sources of cash inflow from investing activities?
Given a Revenue from Operations of $$120,000$ and a gross profit margin that is $20%$ of the cost of goods sold (COGS), what is the amount of the gross profit?
Given a Revenue from Operations of $$120,000$ and a gross profit margin that is $20%$ of the cost of goods sold (COGS), what is the amount of the gross profit?
Within the context of financial leverage, what is generally considered the ideal debt-to-equity ratio for a company?
Within the context of financial leverage, what is generally considered the ideal debt-to-equity ratio for a company?
Partners A, B, and C share profits and losses in the ratio of 3/8, 1/2, and 1/8, respectively. If partner A dies, what will be the new profit-sharing ratio between B and C?
Partners A, B, and C share profits and losses in the ratio of 3/8, 1/2, and 1/8, respectively. If partner A dies, what will be the new profit-sharing ratio between B and C?
Which of the following items are typically found in the Receipts and Payments Account of a non-profit organization?
Which of the following items are typically found in the Receipts and Payments Account of a non-profit organization?
Match the following items with their respective categories:
List I:
(A) Operating Activities
(B) Investing Activities
(C) Financing Activities
(D) Cash Equivalent
List II:
(I) Issue of Equity shares
(II) Purchase of Marketable Securities
(III) Cash Sales
(IV) Purchase of Fixed Assets
Match the following items with their respective categories:
List I: (A) Operating Activities (B) Investing Activities (C) Financing Activities (D) Cash Equivalent
List II: (I) Issue of Equity shares (II) Purchase of Marketable Securities (III) Cash Sales (IV) Purchase of Fixed Assets
X Ltd.'s long-term loan balances were $$200,000$ on April 1, 2021, and grew to $$260,000$ by March 31, 2022. During the year, the company also repaid a loan of $$100,000$ with an interest rate of 10%, repaid on April 1, 2021, and a fresh loan was taken on March 31, 2022. What is the net cash flow from financing activities?
X Ltd.'s long-term loan balances were $$200,000$ on April 1, 2021, and grew to $$260,000$ by March 31, 2022. During the year, the company also repaid a loan of $$100,000$ with an interest rate of 10%, repaid on April 1, 2021, and a fresh loan was taken on March 31, 2022. What is the net cash flow from financing activities?
According to Section 52(2) of the Companies Act, 2013, for what purposes can the Securities Premium Reserve be utilized?
According to Section 52(2) of the Companies Act, 2013, for what purposes can the Securities Premium Reserve be utilized?
What is the term for the portion of a company's capital that can only be called up in the event of its liquidation or winding up?
What is the term for the portion of a company's capital that can only be called up in the event of its liquidation or winding up?
What is the correct order of operations for calculating Earnings Per Share (EPS)? The steps include: (A) Calculate number of equity shares; (B) Calculate earnings available for equity shareholders; (C) Compute profit after tax; (D) Compute EPS.
What is the correct order of operations for calculating Earnings Per Share (EPS)? The steps include: (A) Calculate number of equity shares; (B) Calculate earnings available for equity shareholders; (C) Compute profit after tax; (D) Compute EPS.
On April 1, 2022, A, B, and C dissolved their partnership. The balance sheet showed Sundry Debtors at $$600,000$ and Provision for Doubtful Debts at $$30,000$. $$60,000$ of the debtors proved bad. What amount will be credited to the Realization Account in the journal entry for realization of debtors?
On April 1, 2022, A, B, and C dissolved their partnership. The balance sheet showed Sundry Debtors at $$600,000$ and Provision for Doubtful Debts at $$30,000$. $$60,000$ of the debtors proved bad. What amount will be credited to the Realization Account in the journal entry for realization of debtors?
Categorize each item correctly: (A) Bank Overdraft; (B) Dividend Received; (C) Provision for Doubtful Debts; (D) Cash Received from Sale of Goods with the following list: (I) Non-cash item; (II) Financing Activity; (III) Operating Activity; (IV) Investing Activity.
Categorize each item correctly: (A) Bank Overdraft; (B) Dividend Received; (C) Provision for Doubtful Debts; (D) Cash Received from Sale of Goods with the following list: (I) Non-cash item; (II) Financing Activity; (III) Operating Activity; (IV) Investing Activity.
Nitin Ltd. has provided with the following information: Machinery was valued at $$240,000$ on April 1, 2021, and $$350,000$ on March 31, 2022. Accumulated Depreciation was $$50,000$ and $$45,000$ accordingly. During the year, a machine costing $$90,000$ with accumulated depreciation of $$31,500$ was sold for $$52,000$. What is the net cash flow from Investment Activities?
Nitin Ltd. has provided with the following information: Machinery was valued at $$240,000$ on April 1, 2021, and $$350,000$ on March 31, 2022. Accumulated Depreciation was $$50,000$ and $$45,000$ accordingly. During the year, a machine costing $$90,000$ with accumulated depreciation of $$31,500$ was sold for $$52,000$. What is the net cash flow from Investment Activities?
To calculate cash flow from Operating Activities, what is the correct order of adjustments?
(A) Addition and subtraction of Non-cash/non-operating items
(B) Payment of income tax
(C) Calculation of operating profit before working capital changes.
(D) Calculation of net profit/loss before tax and extraordinary items
To calculate cash flow from Operating Activities, what is the correct order of adjustments?
(A) Addition and subtraction of Non-cash/non-operating items (B) Payment of income tax (C) Calculation of operating profit before working capital changes. (D) Calculation of net profit/loss before tax and extraordinary items
Match List I with List II.
List I
(A) Share forfeiture
(B) Shares reissued
(C) Excess application money refunded
(D) Calls money received
List II
(I) Cr. share capital
(II) Dr. share capital
(III) Dr. Bank A/c
(IV) Cr. Bank A/c
Match List I with List II. List I (A) Share forfeiture (B) Shares reissued (C) Excess application money refunded (D) Calls money received
List II (I) Cr. share capital (II) Dr. share capital (III) Dr. Bank A/c (IV) Cr. Bank A/c
If a share with a face value of $$10$ on which $$7$ has been paid is forfeited, what is the minimum price at which it can be reissued?
If a share with a face value of $$10$ on which $$7$ has been paid is forfeited, what is the minimum price at which it can be reissued?
Given:
Share of profit transferred to Capital Accounts: Ram $$7,000$, Shyam $$3,500$
Interest on Capital: Ram $$1,500$, Shyam $$500$
Interest on Drawings: Ram $$300$, Shyam $$200$
Ram's salary $$1,000$
From the information provided, calculate the net profit.
Given: Share of profit transferred to Capital Accounts: Ram $$7,000$, Shyam $$3,500$ Interest on Capital: Ram $$1,500$, Shyam $$500$ Interest on Drawings: Ram $$300$, Shyam $$200$ Ram's salary $$1,000$ From the information provided, calculate the net profit.
M and R are partners with capital balances of $$400,000$ and $$300,000$ respectively on April 1, 2021, sharing profits in a 3:2 ratio. M introduces additional capital on August 1, 2021. Interest on capital is allowed at 6% p.a., with total interest for both partners at $$50,000$. Calculate the additional capital introduced by M in August and interest earned on it, give that books close on 31st March.
M and R are partners with capital balances of $$400,000$ and $$300,000$ respectively on April 1, 2021, sharing profits in a 3:2 ratio. M introduces additional capital on August 1, 2021. Interest on capital is allowed at 6% p.a., with total interest for both partners at $$50,000$. Calculate the additional capital introduced by M in August and interest earned on it, give that books close on 31st March.
How would you match these from List-I and List-II :
List-I
(A) Receipts and Payment A/c
(B) Capital receipt
(C) Match fund
(D) Income and Expenditure A/c
List-II
(I) Special fund
(II) Life membership fees
(III) Accrual basis
(IV) Cash basis
How would you match these from List-I and List-II : List-I (A) Receipts and Payment A/c (B) Capital receipt (C) Match fund (D) Income and Expenditure A/c
List-II (I) Special fund (II) Life membership fees (III) Accrual basis (IV) Cash basis
A company holds 12% government securities worth $$85,000$ since March 31, 2021, purchased at par. Additional 12% securities worth $$50,000$ were bought on March 31, 2022. Receipts and Payments A/c shows total interest debited at $$9,000$ from these securities. What is the accrued interest on March 31, 2022?
A company holds 12% government securities worth $$85,000$ since March 31, 2021, purchased at par. Additional 12% securities worth $$50,000$ were bought on March 31, 2022. Receipts and Payments A/c shows total interest debited at $$9,000$ from these securities. What is the accrued interest on March 31, 2022?
From the following information calculate how much amount of depreciation will be shown in the Income and Expenditure A/c for the year 2021-22:
As on 31 March, 2021, Furniture was valued at $\180,000$.
As on 31 March, 2022, Furniture was revalued at $$160,250$.\8,000 worth of old furniture was sold for $$10,000$ on 1 April, 2021
From the following information calculate how much amount of depreciation will be shown in the Income and Expenditure A/c for the year 2021-22: As on 31 March, 2021, Furniture was valued at $\180,000$. As on 31 March, 2022, Furniture was revalued at $$160,250$.\8,000 worth of old furniture was sold for $$10,000$ on 1 April, 2021
A non-profit organization had the following:
Amount of subscription credited to Income and Expenditure A/c for the year ended 2021-22: ₹1,05,000
Subscription received in advance as on 31 March, 2022: ₹10,000
Subscription received in advance as on 31 March, 2021: ₹7000
Subscription outstanding as on 31 March, 2021: ₹10,500
Subscription outstanding as on 31 March, 2022: ₹20,500
Calculate amount of subscription credited
A non-profit organization had the following:
Amount of subscription credited to Income and Expenditure A/c for the year ended 2021-22: ₹1,05,000 Subscription received in advance as on 31 March, 2022: ₹10,000 Subscription received in advance as on 31 March, 2021: ₹7000 Subscription outstanding as on 31 March, 2021: ₹10,500 Subscription outstanding as on 31 March, 2022: ₹20,500
Calculate amount of subscription credited
Calculate prize fund expenses incurred during the year 2021-22 given:
Prize fund as on 1 April, 2021 : ₹ 80,000,
Donation received for Prize Fund : ₹ 15,000,
10% Prize Fund Investment : ₹ 80,000,
Interest Received : ₹ 5,000,
Interest Accrued: ₹ 3,000,
Prize fund as on 31 March, 2022 : ₹ 70,000.
Calculate prize fund expenses incurred during the year 2021-22 given:
Prize fund as on 1 April, 2021 : ₹ 80,000, Donation received for Prize Fund : ₹ 15,000, 10% Prize Fund Investment : ₹ 80,000, Interest Received : ₹ 5,000, Interest Accrued: ₹ 3,000, Prize fund as on 31 March, 2022 : ₹ 70,000.
Sudhir and Vimal entered into a partnership, sharing profits in a 3:2 ratio. Sudhir, due to time constraints, allowed Vimal to manage financial and operational decisions. Due to a COVID-19-related business downturn, they incurred a loss of $$400,000$. Determine Sudhir's share of the loss.
Sudhir and Vimal entered into a partnership, sharing profits in a 3:2 ratio. Sudhir, due to time constraints, allowed Vimal to manage financial and operational decisions. Due to a COVID-19-related business downturn, they incurred a loss of $$400,000$. Determine Sudhir's share of the loss.
Gitansh withdraws $$5000$ at the end of every month for ten months with an interest charge on drawings at 10% p.a. What is Gitansh's total interest on drawings?
Gitansh withdraws $$5000$ at the end of every month for ten months with an interest charge on drawings at 10% p.a. What is Gitansh's total interest on drawings?
Match List I with List II relating to partnership accounting:
List I
A. Interest on loan
B. Fixed capital
C. Fluctuating capital
D. Interest on capital
List II
I. Current Account
II. Charge Against Profit
III. Capital Account
IV Appropriation of Profits
Match List I with List II relating to partnership accounting: List I A. Interest on loan B. Fixed capital C. Fluctuating capital D. Interest on capital
List II I. Current Account II. Charge Against Profit III. Capital Account IV Appropriation of Profits
Choose the appropriate methods of redemption of debentures from the options below:
(A) By conversion into shares or new debenture
(B) Purchase in open market
(C) Sinking fund
(D) Payment in installments
(E) Payment in lump-sum
Choose the appropriate methods of redemption of debentures from the options below: (A) By conversion into shares or new debenture (B) Purchase in open market (C) Sinking fund (D) Payment in installments (E) Payment in lump-sum
As per central government regulations, what is the stipulated maximum number of partners permissible in a firm, in accordance with Rule 10 of the Companies (Miscellaneous) Rules, 2014?
As per central government regulations, what is the stipulated maximum number of partners permissible in a firm, in accordance with Rule 10 of the Companies (Miscellaneous) Rules, 2014?
Flashcards
Initial Public Offer (IPO)
Initial Public Offer (IPO)
Shares offered to the public for subscription.
Forfeiture Impact
Forfeiture Impact
Reduction of capital due to unpaid amounts.
Sweat Equity Shares
Sweat Equity Shares
Cash or equity given for effort.
Investing Cash Inflows
Investing Cash Inflows
Signup and view all the flashcards
Ideal Debt Equity Ratio
Ideal Debt Equity Ratio
Signup and view all the flashcards
Non-Current Liabilities
Non-Current Liabilities
Signup and view all the flashcards
Financing Activities
Financing Activities
Signup and view all the flashcards
Receipt and Payment Account
Receipt and Payment Account
Signup and view all the flashcards
Securities Premium Reserve
Securities Premium Reserve
Signup and view all the flashcards
Uncalled Capital
Uncalled Capital
Signup and view all the flashcards
Calculating EPS
Calculating EPS
Signup and view all the flashcards
Realisation of Debtors
Realisation of Debtors
Signup and view all the flashcards
Non cash item
Non cash item
Signup and view all the flashcards
Net Cash Flow Investing
Net Cash Flow Investing
Signup and view all the flashcards
Cash Flow Sequence
Cash Flow Sequence
Signup and view all the flashcards
Where to record Forfeiture
Where to record Forfeiture
Signup and view all the flashcards
Minimum Reissue Price
Minimum Reissue Price
Signup and view all the flashcards
Net Profit Calculation
Net Profit Calculation
Signup and view all the flashcards
Partner Capital Calculation
Partner Capital Calculation
Signup and view all the flashcards
Income Expenditure Ac
Income Expenditure Ac
Signup and view all the flashcards
Subscription calculation
Subscription calculation
Signup and view all the flashcards
Profit sharing ratio
Profit sharing ratio
Signup and view all the flashcards
Amount drawing by Gitantsh
Amount drawing by Gitantsh
Signup and view all the flashcards
Techniques Of Financial Statements Analysis
Techniques Of Financial Statements Analysis
Signup and view all the flashcards
Modern Accounting practices
Modern Accounting practices
Signup and view all the flashcards
Study Notes
- An issue of shares made to the public in general for subscription is called Initial Public Offer (IPO).
Forfeiture of Shares
- Forfeiture of shares reduces Capital.
Balance Sheet Liabilities
- Cash Credit is not included in non-current liabilities when preparing a Balance Sheet.
Sources of Cash Inflow from Investing Activities
- Sources include Dividend Received from Investment, Cash Receipt from Disposal of Shares and Fixed Assets, and Cash proceeds from issuing Shares and Debentures.
Revenue and Gross Profit
- If Revenue from Operation is ₹ 120,000 and gross profit is 20% of cost, then the gross profit is ₹ 24,000
Ideal Debt Equity Ratio
- The ideal Debt Equity Ratio is 2:1.
Partner's Profit Sharing Ratio
- If A, B, and C share profits and losses in the ratio of 3/8, 1/2, 1/8, and A dies, the new ratio of B and C is 4:1.
Receipt and Payment Account Items
- The items includes Life membership fees and Sale of fixed assets
Matching Lists for Accounting Activities
- Operating Activities: Cash sales
- Investing Activities: Purchase of fixed assets
- Financing Activities: Issue of equity shares
- Cash Equivalent: Purchase of Marketable securities
Net Cash Flow Calculation
- To calculate Net Cash Flow from Financing Activities for X Ltd:
- April 1, 2021 Long-term Loan: ₹2,00,000
- March 31, 2022 Long-term Loan: ₹2,60,000
- Loan repaid during the year: ₹1,00,000
- Long-term loan interest rate: 10%
- Loan repaid on April 1, 2021, fresh loan taken on March 31, 2022
Securities Premium Reserve Usage
- According to section 52(2) of the Companies Act 2013, the Securities Premium Reserve can be used to:
- Write off preliminary expenses
- Issue fully paid bonus shares, not exceeding the unissued share capital
- Pay premium on redemption of preference shares or debentures
Uncalled Capital
- Uncalled capital is a capital that can be called up only in the event of winding up of the company.
Calculating EPS
- The order to be followed when calculating EPS is:
- Compute profit after tax
- Calculate earnings available for equity shareholders
- Calculate the number of equity shares
- Compute EPS
Dissolution of a Firm
- On April 1, 2022, A, B, and C decided to dissolve their firm.
- The balance sheet showed Sundry debtors at ₹ 6,00,000 and a Provision for doubtful debt at ₹ 30,000.
- Debtors to the extent of ₹ 60,000 were bad.
Matching Lists for Financial Items
- Bank overdraft: Financing activity
- Dividend received: Investing activity
- Provision for doubtful debts: Non-cash item
- Cash received from the sale of goods: Operating activity
Nitin Ltd. Information
- Information includes machinery, accumulated depreciation, and details about the sale of a machine in that same year.
- Calculate Net Cash Flow from Investing Activities.
- 1 April 2021 Machinery: ₹2,40,000, Accumulated Depreciation: ₹50,000
- 31 March 2022 Machinery: ₹3,50,000, Accumulated Depreciation: ₹45,000
Correct Sequence for Cash Flow
- The correct sequence in calculation of Cash Flow from Operating Activities:
- Calculation of net profit/loss before tax and extraordinary items
- Addition and subtraction of Non-cash/non-operating items
- Payment of income tax
- Calculation of operating profit before working capital changes
Matching Lists for Accounting Entries
- Share forfeiture: Cr. Share capital
- Shares reissued: Dr. Share Capital
- Excess application money refunded: Dr. Bank A/c
- Calls money received: Cr. Bank A/c
Shares
- If a share of ₹ 10 on which ₹ 7 has been paid is forfeited, at ₹ 3 is the minimum price to be reissued.
Calculate Net Profit from Information
- Calculate net profit as per P & LA/c for the year ending 31 March, 2022 from:
- Share of profit transferred to Capital A/C's of partners:
- Ram: ₹7,000
- Shyam: ₹3,500
- Interest on capital:
- Ram: ₹1,500
- Shyam: ₹500
- Interest on Drawings
- Ram: ₹300
- Shyam: ₹200
- Ram's salary: ₹1,000
- Share of profit transferred to Capital A/C's of partners:
Partners Sharing Profits
- M and R share profits and losses in a 3:2 ratio.
- Their capital accounts showed balances of ₹4,00,000 and ₹3,00,000 respectively on April 1, 2021.
- M introduced more capital on August 1, 2021.
- Interest on capital is allowed at 6% pa.
- Total interest on capital of both partners is ₹50,000.
Matching List for Accounting
- Receipts, and Payment A/c: Cash basis
- Capital receipt: Life membership fees
- Match fund: Special fund
- Income and Expenditure A/c: Accrual basis
Government Securities
- Valuing 12% government securities as of March 31, 2021 was ₹ 85,000, which were purchased at that date.
- Additional 12% securities worth ₹ 50,000 were purchased on March 31, 2022.
- Total interest debited to receipts and payments A/c is ₹ 9,000.
Depreciation
- From the information, calculate how much depreciation will be shown in the Income and Expenditure A/c for the year 2021-22.
- As on March 31, 2021: Furniture = ₹1,80,000
- As on March 31, 2022: Furniture = ₹1,60,250
- Sold furniture worth ₹ 8,000 for ₹10,000 on April 1, 2021.
Calculate Subscriptions
- Calculate subscription received during the year 2021-22 from the following information, Amount of subscriptions credited to Income and Expenditure.
- A/c for the year ended 2021-22: ₹ 1,05,000
- Subscriptions received in advances as on March 31, 2022: ₹ 10,000
- Subscriptions received in advances as on March 31, 2021: ₹ 7,000
- Subscriptions outstanding as on March 31, 2021: ₹ 10,500
- Subscriptions outstanding as on March 31, 2022: ₹ 20,500
Calculate Prize Fund Expenses
- Calculate prize fund expenses the details are
- Prize fund as on 1 April, 2021: ₹ 80,000
- Donation received for Prize Fund: ₹ 15,000
- 10% Prize Fund Investment: ₹ 80,000
- Interest Received: ₹ 5,000
- Interest Accrued: ₹ 3,000
- Prize fund as on 31 March, 2022: ₹ 70,000
Sudhir and Vimal Partnership
- Sudhir and Vimal started a partnership sharing profits at 3:2
- Due to less time, Sudhir couldn't commit fully so Vimal managed the finances and operations
- The business lost ₹ 4,00,000 due to Covid-19.
Gitansh Withdrawals
- Gitansh withdrew ₹ 5000 pm at the end of every month for ten months
- Interest on drawing is charged @ 10% p.a.
Financial Lists
- Interest on loan: Charge Against Profit
- Fixed capital: Current Account
- Fluctuating capital: Capital Account
- Interest on capital: Appropriation of Profit
Redemption of Debenture
- The methods of Redemption of Debenture are from the following.
- By conversion into shares or new debenture
- Purchase in the open market -Payment in lump-sum
Partners in a Firm
- The central government has prescribed the maximum number of partners in a firm to be 50. This is under Rule 10 of the companies (Miscellaneous) Rules, 2014.
Journal Entry for Deceased Partner
- The journal entry recorded for deceased partners' shares in profit from the closure of the last balance sheet till their death transfers the amount payable to the decreased partner to that person's Loan A/c.
Common Techniques Financial Statements
- The commonly used Techniques of financial Statements Analysis includes:
- Common size statements
- Ratio Analysis
- Trend Analysis
Modern Accounting
- Modern Accounting is based on Double-entry system.
Goodwill Valuation
- A, B, and C were partners sharing profits/losses at 5:3:2. They admitted D into partnership with 1/5 share of profit. D's capital:₹ 50,000
- The Balance Sheet of A, B, and C as follows (as on 31 March, 2021):
- Liabilities include Capital, Cash
- Goodwill is valued at 3 years.
- average profit of the last 4 years.
- On revaluation, all debtors are good.
- Goodwill purchased by new partners would be Distributed to A, B, and C in old Ratio.
Raj Ltd and Equity Shares
- Raj Ltd. was registered which they issued @ $10 per share:
- On Application Rs. 4 per share
- On Application Rs. 3 per share
- and Balance on 2 calls
- Which the company does not distribute to the public : Uncalled Capital
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
