1. What is venture capital ?

A. Venture capital is nothing but risk capital. It is provide capital for new business firms.

2. What is mean by accrued income ?

A. Income earned but not received(The goods or services Provided but the benefit yet to be
received).

3. What is Exgratia ?
A. Exgratia word has come from Latin word. It’s literary Meaning is something extra, over
and above the liability.Thus the Exgratia payments refers to a payment made to Someone in
addition to the actual liability to pay.For example, a lump sum payment over and above the
pension Benefits of a retiring employee.Ex-gratia is Latin form, From favor or as a favor. Also
called ex-gratia settlement

4. What are the basic 3 rules of accounting ?

A. The three rules of Accounting are,Personal -Dr the receiver, cr the giver.Real- Dr wat
comes in, cr wat goes our.Nominal - Dr All expenses and losses, cr all incomes and Gains.

5. How to account the salary advance a/c. I have taken an advance of Rs.25000/-. I
have debited salaries advance a/c and credited the petty cash a/c in tally. I don’t
know Whether it is correct or not. If correct, in my individual Ledger no entry is
reflected. Alternatively, if I debit my Self and credit petty cash a/c it is reflected
in the P & L Account, but it is not an expense. And not reflected in the Balance
sheet, but reflected in P & L. I think I need to Put a journal entry. Like debiting
the salary account and Crediting the salary advance account. Is this correct or
Not? Can any one help me please?
A. If you take a salary advance you have to create your Personal account and debit the
amount to your personal Account. It means this amount is reflecting in the balance Sheet
under sundry debtors. While creating the personal Account the account should be under
current assets.
Journal Entry:
ABC account Dr
To Cash (Being salary advance paid to Mr.).

6. Whatisthe internal audit? And external audit ?

A. Internal Audit is the audit which organizations own Department which name can be Audit
department do to check The function of finance department and as well other Departments.
Audit department checks the Accounts of the Organization and estimates the year
budget.External Audit is the audit the organization calls other Audit organizations to check
their records.

7. What are DIRECT EXPENSES & INDIRECT EXPENSES ?

A. Direct expenses are those expenses which we can attribute To a particular product like
raw materials expenses, direct Labor expenses,Whereas indirect expenses are the expenses
which cannot be Directly attributed to a particular product like rental Expenses (company
producing many products), security Expenses, management expenses. These expenses are
Apportioned to the product on many basis like on per unit Or sales basis etc.

8. What is the limit of CC A/C ?

A. Cash Credit has no limite.it depends upon your working Capital.

9. How to calculate the closing stock value ?

A. 1.closing stock = opening stock + purchase of this period- Sales in this period = closing
stock raw material value + Closing stock finishing material value.
2. There are 3 methods are used for calculation Closing stock value.
1. FIFO:- First In First Out
2. LIFO:- Last In First Out
3. WIEGHTED AVG:- Total closing stock quantity with last purchase rate.
10. How do we treat Bad debts... how to create Provision/reserve for bad debts?
Show an example journal...For creating provision and then writing off debtors ?
A. treatment of Bad debts following is the example Suppose Account Receivable is 2000 At
the of the year it has been estimated that 500 is bad detdtsSo it will be calculate as Account
receivable-Bad debts
Bad debts Dr 500
Account Receivable Cr 500
It will be deducted from Account Receivable
Treatment of Provision or reserve for bad debts
Profits and loss a/c Dr
Reserve for bad debts Cr
Note Reserve for bad debts will be calculate from Profit Therefore profit and loss a/c will be
debited

11. What are miscellaneous expenses? Where it posted? Give with Example and
why it is call miscellaneous expenses ?
A. Miscellaneous expenses are shown in asset side of the Balance sheet after current assets
loans and advances

12. What balance do fixed assets show?

A. Fixed assets will show Net Book value i.e.
NBV = Gross book value – Depreciation

13. What is accrual? Give example for the same?

A. Accrual Means Outstanding
Wages A/c .............Dr
To Outstanding Wages
Outstanding Income ...........Dr
To Income

14. What is contingent liability and where we can take it in balance sheet I mean
under which head?
a. Contingent Liability Means Future Liability.
b. We have to Show Contingent Liability at Foot Note on Balance Sheet.
c. This amount is not included in Balance Sheet.
d. This is a Future Liability.

15. What is IRP?

A. Intellectual property Right (IPR) is legal property rights Over reations of the mind, both
artistic and commercial,
And the corresponding fields of law. Under intellectual Property law, owners are granted
certain exclusive rights To a variety of intangible assets, such as musical, Literary, and
artistic works; ideas, discoveries and
Inventions; and words, phrases, symbols, and designs. Common types of intellectual
property include copyrights, Trademarks, patents, industrial design rights and trade Secrets.

16. What does u mean by GDP, explain in detail ?

A. Gross domestic product.Value for after production completed\GDP means the total
market value of all the goods and services produced within the borders of a nation during a
specified period.

17. What do u mean by Deferred Revenue Expenses? Explain with examples?

A. Deferred Revenue Expenses are those expenses which are spent in large amount in any
year but the benefit of which accrues for many years. Hence, it is written off through profit
and loss account during their benefit period. For example, huge amount spent on advertising
during launching of a product, the benefit of which will accrue for five years. This
expenditure will be written off in the profit and loss account of succeeding five years.

18. what is amortization ?

A. amortisation mean written of the intagible asset. it is caculated intangble asstes.like
goodwill, copyrights, R&D Decrease in the value of intangible asset like goodwill,Patents.

19. What is General Ledger ? Why is it used ?

A. This is a book of separate accounts of each item being involved in the business either
tangible or intangible. It has each and every transactional activity recorded in it under the
concerned account which always show a balancing figure either debit or credit which may
later be squared up by adjusting entries. It is More useful in Double Entry System of
accounting.

20. What is Quick Book ?

A. It is accounting software widely used in US.

21. I want to know that how export any ledger to excell from tally 5.4 ?
A. Open a particular ledger - Alt + E – Select excel launguage and add xls with output fill
name – accept go to Tally Select the Ledger on top of the menu u can see wor dcalled
"Export" click on this & export. The exported itme will normally go & sit in Local drive C
under tally as excel.and also u can give the output file name to identify easily.

22. Why the loss by fire taking in to the credit side of the trading a/c.instead of
this is company's loss ?
A. The Trading A/c is prepared to show the profit/loss from trading activities. Goods lost by
fire haven't been sold and aren't in the closing stock either (obviously), but the
corresponding purchase amount has been debited. Therefore,the cost of goods lost by fire is
credited to show the correct/accurate result from trading activities.

23. What is equity? and how it is calculated ?

A. Amount owed by the business to Shareholoders. It is calculated as followes Paid up
Capital + Free Reserves + Credit balance of P&L -Accumulated losses.

24. Who prepare income and expenditure account and for what ?
A. Income and expenditure a/c is prepared by a Non-Profit- organisation to know how much
they spends and earns for the particualar year of p'cular organisation.

25. Difference between Wages and Expense ?

A. Wages is direct income but expenses is indirect expenses.

26. Realization concepts of revenue?

A. realization of revenue means the revenue is said to be realized when the goods and
services are delivered not at the time when cash is received. for ex: if someone sells the
goods on credit on 1st april 2009 and the cash is received on 1st aug 2009, we considered
the revenue is realized on 1st of april 2009 not when the cash is received.

27. Difference between single and double entry ?

A. System of recording both aspect of transaction in accounting books ia called double entry
only one aspect recording of transaction in accounting books it is uncompleted entry.once
upon time used single entry systems. Now a days using double accountnig system. single
entry means only cash iteams.
Ex:-Purchase A/c .......Dr
To Cash
Double entry means Both Cash & Credit.
Ex:- Purchase A/c ......Dr
To xxx (Being Credit base).
28. what will be entry for bank charges in cash book ?
A. Bank charges A/C ......... Dr.
To cash A/C.

29. What are bad debits ?

A. Which amounts are not recovered from customer.

30. Difference between Income & Expenditure and Profit and Loss Account ?
A. Income & Expenditure prepare non-profit organisations such as schools and colleges
trusts and where as Profit and Loss Account prepare all other organisations.

31. Preliminary expense of company ?

A. Which expenses incurred at formation of the company is called preliminary expenses.

32. Difference between debenture and unsecure loans ?

A. Debentures are issued on the basis of interest, paid to the holders. and they are not the
part of the company.incase of unsecured loans, the loans which are lended to the company
on the Goodwill basis, but not for interest. in simple i.e., the companies reputation in the
market. no bond nothing.

33. What is purchase order, what is seen in purchase order ?

A. purchase order is issued by buyer to seller in which he provide details of quantity to be
purchase and agree to same for business.
34. What is dishonor check ?
A. Dishnour Cheques are those cheques which disqualifies from bank for any dealings with
the bank in the form of cash.
Reasons For Dishounours:
1) Post dated cheques given
2) insuffeint signa
.tures
3) Cheques are not crossed when it is paying for account payee.

35. What is diluted EPS? in finance what is the use of diluted EPS ?
A. Remember that earnings per share is calculated by dividing the company's profit by the
number of shares outstanding.Warrants, stock options, convertible preferred shares, etc.all
serve to increasing the number of shares outstanding. As a shareholder, this is a bad thing.
If the denominator in the equation (shares outstanding) is larger, the earnings per share is
reduced (the same profit figure is used in the numerator).
This is a conservative metric because it indicates somewhat of a worst-case scenario. On
one hand, everyone holding options, warrants, convertible preferred shares, etc. is unlikely
convert their shares all at once. At the same time, if things go well, there is a good chance
that all options and convertibles will be converted into common stock. A big difference in a
company's EPS and diluted EPS can indicate high potential dilution for the company's
shares, an attribute almost unanimously ostracized by analysts and investors alike.

36. What is Earning per share ?

A. It is the returns or profit on every share invested in the company for those who bear the
risk returns on their investment. Ratio for EPS=PAT(profit after tax)-preferred dividend/No. of
Shares held.

37. What is finance ?

A. procurement of funds and their effective utilizition in the business is called Finance.

38. What is Book Value ?

A. The value at which an asset is carried on a balance sheet. In other words, the cost of an
asset minus accumulated depreciation.
49. What is the diffrence between gross profit& net profit ?
A. gross profit is the result of the operating activities i.e.sale and purchase (items of the
trading a/c)whereas while calculating net profit we also take into consideration the non-
operating expenses and income(items of p&l a/c).

40. What is suspence capital?

A. suspense account is an account used temporarily to carry doubtful receipts and
disbursements or discrepancies pending their analysis and permanent classification.

41. What is a contract note?

A. A Contract note is a confirmation of trade(s) done on a particular day for and on behalf of
a client.

42. What is the meaning of preliminary expenses and how you shown in balance
sheet?
A. Expenses incurred before the commencement of the business are prelimary expenses
and same will be deferred over the period will be shown under Assets side of balance sheet
as Miscellaneous Expenses (Asset).

43. What is public ltd company and difference between public ltd company and
public sector undertaking?
A. Public LTD.Company is a privately owned and all shares are open to market and they can
take self decision on products.A public sector company is one which have more than 50%
shares with government and remaining open to public. These sectors have indirect cotrol by
govt. of india.

44. In intangible assest, patents ,trade marks,copy rights we can feel or some
thing can be done but what about goodwill?
A. Goodwill is considered as an intangible asset. Goodwill means the name and fame and
reputation of a company. Through goodwill a company can get good recognition in the
market and it can easily secure loans from the financial institution for its expansion and
other activites.

45. What is the internal audit? and exteranal audit?

A. Internal Audit is the audit which organization's own department which name can be Audit
department do to check the function of finance department and as well other departments.
Aduit department checks the Accounts of the organization and estimates the year budget.
External Audit is the audit the organization calls other Audit organizations to check their
records.

46. Why net profit will be added to the balance sheet? is there any reason?
A. Balance Sheet represents the financial position of an organisation. By looking into
balance sheet one must be able to know the financial status of a company..etc. It contains
the information of all the assets and liabilities.Net profit will be added to the balance sheet
to give a clear picture of the financial position.

47. What is transaction?

A. Transaction means any work or exchange of goods or services,in accounting we are
considering all financial(which have monetary character means measure in monitory terms)
issues are transactions.

48. What Does Suspense Account Mean?

A. Suspense account is usually maintained when there occurs and diffrence in the debit and
credited side of trail balance. So Suspense account is maintained to adjust the difference in
trial balance. It may occur due to the following: error of ommission error of commission error
of principle The main purpose of this account is to show the ture and fair picture of
balancesheet.

49. What is the meaning of LIQUIDITY ? What is merger, acquisition &

amalgamation ? What is the differnce between them ? What is the taxable vlue of
the following fring benefits tax ? a) Concessional ticket provided by the employer
for private journey of an employee and his family members.b) Gifts and
scholarship ?
A. liquidity means that the firm has to have cash.
To meet its bills(day to day transaction).
To meet unexpected commitments.
To meet emergencies.
Liquidity and Profitability are closely related. Liquidity means companies ability to meet its
day to day expences through cash or other liquid assets wich can be easily converted in to
cash, it is very essential to maintain the liquidity, liquidity and profitability are indirectly
related.

50. What is Book Keeping ?

A. Bookkeeping (also book-keeping or book keeping) is the recording of all financial
transactions undertaken by an individual or organization (including a corporation or legal
person). Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what
money comes in, what goes out, and what is left." Bookkeeping is part of the accounting
cycle, and bookkeepers' work is closely related to that of accountants.
Two common book keepings are Single entry and Double entry
Single entry uses only income and expenses accounts recorded primarily in a revenue and
exp.journal.Use in small business. Double entry book keeping requires posting of each
transactions twice(debit and credit).

51. Difference between funds flow statement & Cash flow statement ?
A. cash flow statement shows what a company receives in cash and what he pays in cash.
fund flow statment shows the source where the fund comes and uses where the fund
deploy.

52. What is portfolio management ? and what is zero based budget ?

A. Zero Based Budget is the budget which starts with the zero base or from scratch, it does
not consider past performance... Portfolio management is managing different securities in
an effective and effective manner...

53. What is Private Placement ?

A. If the company promoters sell the shares to their friends, colleagues, wellwishers,family
members and selected set of peopleetc., called privated placement.

54. What is 'TREASURY STOCK / TREASURY SHARES' ?

A. Stock that has been repurchased by the issuing company.
These shares don't pay dividends, have no voting rights, and should not be included in
shares outstanding calculations.

55. What is the treatment for 'DEFERRED REVENUE EXPENDITURE' ?

A. where the expenditure is revenue in nature but the benefits which the business unit is
getting as long period then it is known as Deferred Revenue Expenditure.

56. What are the types of MUTUAL FUNDS ?

A. On the basis of life span (1)Open Ended (2) Close Ended
On the basis of income mode (1)Income Funds (2) Growth Funds
On the basis of Portfolio (1) Equity Schemes (2) Debt Schemes (3) Balanced Schemes
On the basis of Securities (1)Capital Market Schemes (2) Money Market
Schemes On the basis of Sectors : Different Sectoral SchemesLoad basis (1) Load Schemes
(2) No load Schemes Special Schemes- Index, Offshore, gilt, ETF, Fund of Funds.
57. What is the difference b/w NPV and PBP ?
A. NPV is NET Present Value, it is a standard method to measure the time value of money to
appraise long-term projects. Its also called as Net Present worth.PBP is PayBack Period,
measures the time required for the cash inflows to equal the original outlay. It measures
risk, not return.

58. What is the difference between reserve capital and capital reserve ?
A. Reserve capital is the uncalled capital which the shareholders cannot be called upon to
pay unless the company goes into liquidation. Capital reserve is created out of profits of a
apitalnature.eg;premiums received on the issue of shares and debentures,selling a fixed
asset at a higher price than its book value etc....

59. Who Invented Accountancy ?

A. Lucas pasioly invented the Accounting system.

60. What is mean by accured income ?

A. Income earned but not received. (The goods or services provided but the benefit yet to
be received).

61. What is derivative?

A. The term "Derivative" indicates that it has no independent value. its value is entirely
derived from the value of the underlying asset.The underlying asset can besecurities,
commodities, bullion, curriency,live stock or anything else.In other words, Derivative means
a forward, future, option or any other hybrid contract of pre determined fixed duration.

62. What is mean by Journalising ?

A. Recording of business transactions in a Journal is called Journalising.

63. What is the effect of rapo rate ?

A. Whenever the banks have any shortage of funds they can borrow it from rbi. Repo rate is
the rate at which our banks borrow rupees from rbi. A reduction in the repo rate will help
banks to get money at a cheaper rate. When the repo rate increases borrowing from rbi
becomes more expensive.
One more clarification ot you as a value addition........
Reverse repo rate:
Reverse repo rate is the rate at which reserve bank of india (rbi) borrows money from banks.
Banks are always happy to lend money to rbi since their money are in safe hands with a
good interest. An increase in reverse repo rate can cause the banks to transfer more funds
to rbi due to this attractive interest rates.

64. What is BRS ?

A.a bank reconciliation statement is a statement where in the causes responsible for the
difference between the cash book balance and the pass book balance(as per bank balance)
is ascertained and suitable adjustments are made thereon so that the balance of both the
books are reconciled or agreed with each other. A bank reconciliation statement can be
started either with a cash book balance or with a pass book balance.
Reasons for difference :
1. Deposits made by the third party directly to the bank.
2. Cheque deposited by into the bank but not yet cleared.
3. Interest & charges debited or credited by bank.
4. Cheque issued but not presented for payment by the third party.

65. What is a cash flow Statement?

A. Cash flow statement is one of the financial cash management.it shows that from where
the money has come and where is has gone.

66. What is the order for cash flow statement ?

A. The most commonly used format for the cash flow statement is broken down into three
sections: cash flows from operating activities, cash flows from investing activities, and cash
flows from financing activities.

67. Tell the ratio where the numerator and denominator should contain from
asset side and other from liabilities side ?
A. It shold be either current assets ration or else liquide assests ratio
Current Assets Ratio Logic: Current Assets/current liabilites.
Quick Ratio = Quick assets/ Current liabilities.
Absolute quick Ratio = Cash and Bank + Marketable securities /current liabilities.
All liquidity ratios are the examples except cash interval measure.

68. How to treat the provision for bad debts which appear on credit side of the
p&L A/c ?
A. Provision for bad debts is gain of the company it is in appears in credit side of the profit
and loss account because rule of nominal account debit all exp and losses credit all incomes
and gains.

69. What is the mean by red herriting ?

A. A preliminary registration statement that must be filed with the sec(securities and
exchange commission)describing a new issue of stock and the prospects of the issuing
company.
There is no price or issue size stated in the red herring, and it is sometimes updated several
times before being called the final prospectus. It is known as a red herring because it
contains a passage in red that states the company is not attempting to sell its shares before
the registration is approved by the sec.

70. What is mean by Dis-investment?

A. reduction in capital investment.
1. The action of an organization or government selling or liquidating an asset or subsidiary.
Also known as "divestiture".
2. A reduction in capital expenditure, or the decision of a company not to replenish depleted
capital goods.
1. A company or government organization will divest an asset or subsidiary as a strategic
move for the company, planning to put the proceeds from the divestiture to better use that
garners a higher return on investment.
2. A company will likely not replace capital goods or continue to invest in certain assets
unless it feels it is receiving a return that justifies the investment. If there is a better place to
invest, they may deplete certain capital goods and invest in other more profitable assets.
Alternatively a company may have to divest unwillingly if it needs cash to sustain
operations.

71. What is the meaning of derivative ?

A. Derivative are financial instruments whose value are derived from underlying assets,
which may be stock, shares, debentures, currency etc.

72. Do you have debit and credit in balance sheet ?

A. NO ! We can not say that. But Balance Sheet has always divided in two parts One is LHS
has LAIBILITES and RHS has ASSESTS. All credit entry which has not included in P & L A/c
comes in balance sheet laibilities side. same all debit entry which has not included in P & L
a/c comes in assests side.

73. How did you know about capitaliq? what is the meaning of iq ?
A. Through Internet, IQ= Intelligence Quotient.

74. What is provision and reserve and how u treat in account ?

A. reserve is the part of the capital of the company provision is an amount set aside out of
profits.
75. How many methods are there in capital budgeting? What are those ?
A. Capital budgeting (or investment appraisal) is the planning process used to determine
whether firm's long term investments such as new machinery, replacement machinery, new
plants, new products, and esearch and development projects are worth pursuing.
Many formal methods are used in capital budgeting, including the techniques such as
Net present value
Profitability index
Internal rate of return
Modified Internal Rate of Return, and
Equivalent annuity.
These methods use the incremental cash flows from each potential investment, or project.
Techniques based on accounting earnings and accounting rules are sometimes used -
though economists consider this to be improper - such as the accounting rate of return, and
"return on
investment." Simplified and hybrid methods are used as well, such as payback period and
discounted payback period.

76. What is meaning of ficticious asset ?

A. fictious assets are those assets which are not represented by tangable possession or
property eg,priliminary expensis, dr balance of p/l a/c.

77. What is the meaning of empairment asset ?

A. dictionary meaning: weaken or damage in case of tangible assets we use the word
depreciation for reduction in the value of the asset due to obsolence or wear and tear.in the
case of intangible asset there is no wear and tear, so therefore we use the word impairment
for reduction in the value of intangible asset. depreciation is caused only due to wear and
tear.

78. What is the meaning of capital profit and capital receipt? Both are same or
any different are there ?
A. A capital receipt is a receipt which is derived from sale Or purchase of capital assets like
plant and machinery, Furniture,investment (long term) etc., which shall not be Occurring all
the time. A revenue receipts is something Which is earned from daily activities like sale of
goods or Purchase of goods etc. A revenue receipts shall be Repetitive in nature and shall be
shown or credited in the Profit and loss account.The main difference between revenue
receipts and capital Receipts is that revenue receipts are recurring in nature, Which the
government can expect to receive year after year, Whereas capital receipts are a kind of
one-time income. Eg. The salary you receive is your revenue receipt and the Income you
receive by selling your home is capital receipt.

79. What is the meaning of BLUE CHIP COMPANY?

A. Blue Chips Companies are the companies having the huge amount of capital . Basically
these are big companies ,having the market capitalisation more than 12500
crore.Companies like ONGC, TCS, Infosys are included under this category.

80. What is the meaning of hedging?

A. It is an act, in which an investor seeks to protect a position or anticipated position in spot
market by using an apposite in derivities.

81. What is the meaning of INDENTURE ?

A. a contract by which a person, as an apprentice, is bound to service or a deed or
agreement executed in two or more copies with edges correspondingly indented as a means
of identification.
82. What is the neaning of credit worhtyness ?
A. companies ability to meet all its debts,maintains sustainablity in its operations for the
period in question.creadit worthiness is important factor to be considered by the investor
before investing.

83. What is the meaning of ‘LETTER OF CREDIT’ ?

A. A letter of Credit is Basically a Document issued by bank Guaranteing a clients Ability to
pay for goods or services. A bank or finance copany issues a letter of credit on behalf of an
importer or Buyer.

84. What is monitory interest ?

A. Minority interest means the remaining porstion of the company that means it is not held
by the holding company is called minority interest.

85. Explain accounting concepts ?

A. Accounting concepts are separaate entity, going concern, money measurement, cost,
dual aspect concept and accounting period, periodic matching of costs and revenue concept
and realization of expenditure.

86. What is the trial balance?

A. Trial Balance is a statement which shows all closing debit & credit balances and also
shows the Balance Sheet items, Profit & Loss Account items. The items shown under Trial
Balance are used only once while preparing Balance Sheet. The adjustments given under the
Trial Balance are used twice while preparing Balance Sheet. Trial Balance is the basis for
preparing Balance sheet as well as Profit & Loss A/C.

87. What is ADR’s ?

A. American Depository Receipt. American Depository Receipts (ADRs) are certificates that
represent shares of a foreign stock owned and issued by a U.S. bank. The foreign shares are
usually held in custody overseas, but the certificates trade in the U.S.

88. What is service tax,how much calculated service ?

A. service tax is a indirect tax. All the people are paying this tax when ever they received
any service from the service provider.Calculation of the service tax is based on the service.
Approxamitely 5% on the service.

89. In intangible asset ,patents,trade marks,copy rights we can feel or something

can be done but what about goodwill ?
A. Goodwill is considered as an intangible asset. Goodwill means the name and fame and
reputation of a company.Through goodwill a company can get good recognisation in the
market and it can easily secure laons from the financial institution for its expansion and
other activities.

90. What is the accounting treatment for contingent liability ?

A. There is no accounting treatment for contingent liability according to as3 we have to
disclose it below the balance sheet. but the estimation of the contingent liability is very
important as it has to known by the investors.if you clearly known the out come of the
liability then you can make a provision.

91. What is contract note ?

A. A Contract note is a confirmation of trade(s) done on a particular day for and on behalf of
a client.

92. What is cost of goods sold?

A. sales-gross profit=Cost of goods sold...
93. What is meant by Repo Rate and Reverse Repo Rate.
A. Repo rate is the interest rate at which the reserve bank of india lends mney to other
banks.reverse repo rate is return banks earn on excess funds parked with the central bank
against government securities.

94. What is Deffered Tax?

A. Deffered tax is either tax asset or tax liability. It is temporary difference between book
(accounting) value of assets and liabilities, and their tax value.

95. What do you mean by debt equity ratio?

A. Debt/equity ratio is equal to long-term debt divided by common shareholders' equity.

96. What is the difference between long term debt and short term debt ?
A. The debt which we need to pay within one year is short term debt where as long term
debt is we need to pay more than one year.
97. What is ment by memorandom of association ?
A. A company document which sets out the basis on which a company is established, giving
such details as its name, capital and the extent of the liabilities of its members. The
memorandum of association covers the company's external dealings, as distinct from the
articles of association, which spell out the company's internal rules.

98. Share premium ?

A. The share premium account of a company is the capital that a company raises upon
issuing shares that is in excess of the nominal value of the shares.

99. What should be considered as best in the company's view either debt or
equity ? Explain briefly ?
A. Now this depends on nature of the company if the company requires a huge investment
on fixed assets then equity is best option and on other side if company does not require
huge investments to be made on assets then debt is best option. As we all know there can
be no company with out equity the best option could be to have mixture of both equity and
debt.
100. What is securities market ?
A. The market where the financial assets like shares are going to be in available.

101. What is operating cycle ?

A. The average time between purchasing , acquiring inventory and receiving cash proceeds
from its sale.

102. Which one is best to company either debt or equity ?

A. Whether a company issues debt or equity is a function of the type of business we are
considering. If it is a young or a stratup company then it may not have the requisite
cashflows to service the debt or may get debt at a very high rate, therefore the company
would choose to raise cash through equity.Whereas a well established business with stable
cash flows will be able to service its debt comfortably and would therefore raise debt.Also
the asset base of a company determines how easily a company can raise debtnot.

103. The debit balance of the p&l a/c shown in which column of balance sheet ?
A. It is expenditure over than income because of it should be shown in assets side. Other
wise that losse shoud be decrese from capital.Income over than expenditure it shoud be
showne in reserve and surpless.

104. By whome bank reconsiliation statement is prepared ?

A. See normally bank reconsiliation statement done who is the in charge of company that
people only do the job i.e. Accounts executive, senior accountant and Accounts manager.

105. What is Z.B.B. ZERO BASED BUDGET ?

A. A method of budgeting in which all expenses must be justified for each new period. Zero-
based budgeting starts from a "zero base" and every function within an organization is
analyzed for its needs and costs. Budgets are then built around what is needed for the
upcoming period, regardless of whether the budget is higher or lower than the previous one.

106. What is cash flow and funds flow ? Difference between cash and funds flow?
methods of cash flow ?
A. Cash flow simply means a factual presentation of cash inflows and outflows.This will give
a clear picture of cash and cash equivalents movement during a period of time. On the other
side fund flow is roader term which never confine to cash movemnts only but this will show
the
sources & application of funds and its movements over a period of time.The major key
aspect of fund flow is its working capital presentation.Business operations can easily be
analysed through pointing out the movements of working capital.The key decisions of
management which affect capital structure can be planned by utilising data presented in
fund flow statement through making a comparison of working and fixed capital which will
enable progessive growth in prospective environment.

107. What is oppurtunity cost ?

A. The cost of an alternative that must be forgone in order to pursue a certain action. Put
another way, the benefits you could have received by taking an alternative action.
Example: if a gardener decides to grow carrots, his or her opportunity cost is the alternative
crop that might have been grown instead (potatoes, tomatoes, pumpkins, etc.).

108. What is authorised capitla and subscribed capital ?

A. At the time of Incorporation of Company, in Article of association the maximum limit of
Capital to be raised from shareholder are mention called Authorised Share Capital. Note,
company cannot raised capital amount more than Authorised Captial unless the Article of
Association is ammended by passing special resolution by the share holders with approval of
central Government and ROC. Subscribed share Capital is nothing but the share Capital
issued to the shareholder and subscribed by share holder.

109. What is sunk cost ?

A. Sunk cost is the historical cost incurred in the past. This may not be useful for the
decision making process. Ex: To dispose my machinery I have no use of knowing how much
it is depreciated till now.What I want is just thecurrent market price.So,Sunk cost is
immaterial.

110. Stock Turnover Ratio ?

A. stock turnover ratio = Cost of goods sold/Average stock * 100
Cost of good sold = Sales – Gross profit (or)
Opening stock + Purchase + Direct Expenses – Closing stock.

111. What are operating Costs ?

A. The day-to-day expenses incurred in running a business, such as sales and
administration, as opposed to production. also called operating expenses. Formulae =o.p
cost /sales *100

112. What is Capital Expenditure ?

A. Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A
capital expenditure is incurred when a business spends money either to buy fixed assets or
to add to the value of an existing fixed asset with a useful life that extends beyond the
taxable year. Capex are used by a company to acquireor upgrade physical assets such as
equipment, property, or industrial buildings.

113. IPO ?
A. IPO stands for Initial Public offering. The shares are issued for the first time to the public
as opposed to the secondary market.
114. What is net worth ?
A. Net worth is a stockholder's equity, it consist of equity share capital plus reserve and
surplus. In other words its a difference between total assest and total liabilities.

115. What is quick asset ?

A. Assets that can be easily be converted into cash or are already in cash form. It is
calculated as current assets minus inventories.

116. What is holding company ?

A. Owning 51% of of company's share doesn't mean you are the owner, it is much more of a
controlling interest, while the other 49 are the minority interest. Holding company are form
to focus on managing its share to subsidiary company while subsidiary focus on opration.

117. What is insider trading ?

A. When a person gets the information about the internal decisions of the management of
the company, which may include information regarding dividend declaration, or expansion
project etc. even before they are being officially proclaimed through company spokesperson,
and trades the shares of that company in a stock exchange, then such type of trading is
callled as Insider trading. It is illegal as the stock exchange is allowed to operate on market
speculations and not on the basis of inside information about the company.

118. What is indirect tax ?

A. A tax that is not assessed on and collected from those who are intended to bear it. Unlike
a direct tax,it cannot take individual circumstances into account. Although levied on
producers, the burden of an indirect tax may be 'shift' toconsumers. Ex: value added tax,
sales tax, payroll tax and excise duties.