Explore topic-wise InterviewSolutions in Current Affairs.

• Transfer of shares means the transfer of ownership of the shares from one person to another against consideration.
• Transfer of shares is effected by removing the name of the existing shareholders (transferor) from the register of members and inserting the name of the new member (transferee).
• Transfer of shares is a voluntary process of transferring shares by a member of a company.

A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. A rights issue is a way by which a listed company can raise additional capital.

The accountant provides accounting information to various interested users for analysis as per their requirements.

1. Internal users: Owners, Management and Employees. 

2. External users: Creditors, Investors, Customers, Tax authorities, Government, Researchers and General Public.

Accounting is the systematic process of identifying, measuring, recording, classifying, summarising, interpreting and communicating financial information.

Accounting gives information on:

1. The resources available 

2. How the available resources have been employed and 

3. The results achieved by their use.

The important role of an accountant is: 

1. Record keeper: The accountant maintains a systematic record of financial transactions. 

2. Provider of information to the management : The accountant assists the management by providing financial information required for decision making and for exercising controls.

3. Protector of business assets: The accountant maintains records of assets owned by the business which enables the management to protect and exercise control over these assets. 

4. Financial advisor: The accountant analysis financial information and advises the business managers regarding investment opportunities, strategies for cost savings, capital budgeting, provision for future growth and development, expansions of enterprise, etc. 

5. Tax managers: The accountant ensures that tax returns are prepared and filed correctly on time and payment of tax is made on time 

6. Public relation officer: The accountant provides accounting informations to various interest users for analysis as per their requirements.

It is also called a follow-on public offer. When the company issue shares to the public after IPO, it is called a further public offer. Thus every issue of shares by a listed company after its IPO is called an FPO. FPO leads to an increase in the subscribed capital of the company.

• An instrument on which if the signature of the transferor is forged is called forged transfer.
• It is a null transfer and does not counter any title.
• As the signature of the transferor is forged, the company should not register such transfer of shares.

Any written or printed document in support of a business transaction is called a voucher.

They are maintaining single entry systems, so the cash book and personal accounts are being maintained by them. The nominal accounts are not being maintained by them, so we can not find out the accurate profit or loss on the business. We can find out the estimated value only.

There are three basis of accounting in common usage. 

1. Cash basis 

2. Accrual or mercantile basis

Researchers who carry out their research can use accounting information and make use of the published financial statements for analysis and evaluation.

(c) Insolvency

Cash transaction: 

It is a transaction which involves immediate cash receipt or immediate cash payment. 

Credit transaction:

It is a transaction in which cash is not received or paid immediately, but will be received or paid later.

(d) Solving tax disputes with tax authorities

1. To keep a systematic record of financial transactions and events. 

2. To ascertain the profit or loss of the business enterprise.

Voucher: 

Any written or printed document in support of business transaction is called a voucher. 

Examples: cash receipts, bank pay – in – slip, etc.

Invoice: 

It is a statement prepared by a seller of goods to be sent to the buyer. It shows details of quantity, price, value, etc., of the goods and any discount given, finally showing the net amount payable by the buyer.

1. Debtor: A person who receives a benefit without giving money or money’s worth immediately, but liable to pay in future or in due course of time. 

2. Creditor: A person who gives a benefit without receiving money or money’s worth immediately but to claim in future.

The correct answer is : (d) Expense

A person who gives a benefit without receiving money or money’s worth immediately but to claim in future.

(c) gross loss

1. False

2. True

3. True

4. False

5. True

6. False

7. False

8. True

9. False

10. True

The correct answer is : (a) Journal

(b) Employee

1. Equity share capital

2. Rights Shares

3. Face Value

4. ESOS

5. Allotment of shares

(c) Balance Sheet

This statement is True.

A Trial balance is a statement of debit and credit balances extracted from the various accounts in the ledger. All business transactions are recorded first in Journal or in subsidiary books and subsequently, they are posted to respective ledger accounts. At the end of the year, they are balanced and transferred to the Trial balance.

1. We experience difficulties when we walk through the street where all houses have elevation with mirrors. 

2. Due to the formation of multiple images of the people walking in the street, they often were put to confusion. 

3. It is difficult for birds to live or fly in that street as the reflections will give confusion to them.

1. When water is sprinkled on a mirror the plane surface of the mirror is disturbed. 

2. So the clarity in the images goes away and due to reflection taking place in a scattered way, the image becomes dull arid unclear.

(a) The purpose of the dish is to collect a large amount of TV signals from the satellite. 

(b) Concave. 

(c) At the focus of the dish. 

(d) Stronger signals will be received.

When contra transaction is recorded in the cash book, word ‘C’ (Contra) is written in the L.E No. column of cash book on the both the side, which indicates that positing of this transaction is not to be done.

‘Contra transaction’ means such financial transaction, in which cash and bank, both the accounts get affected. This type of transaction is recorded on both the side of cash book.

Generally, contra transactions are of two types :

1. Cash deposited in the bank and
2. Cash withdrawn from the bank.

Characteristics of provision are as under :

• Provision is an amount appropriated from profit or income for specific purpose.
• Provision is an amount appropriated from – profit for probable expenses or losses or liabilities for which the amount cannot be determined accurately.
• Provision is appropriated out of profit and loss account.

Correct option is (b) Internal reserve

Importance of provision is as under:

• True and fair profit or loss of the business can be ascertained.
• On the expiry of the useful life of an asset, the managed funds (Provision) can be used to purchase new assets.
• Known liability of future can be spread evenly over certain years by making provisions.
• Assumption of going concern and principle of prudence can be followed by making provision.
• Business capital will be maintained by making provisions.
• To show the assets and liabilities of the business at correct and true value.
• To provide for future losses and expenses if amount of such losses and expenses is not determined in advance.
• Provision is made to prevent impact of transactions made during the year on the financial performance in future.

Considering the future, the amount set apart from the profit is known as a reserve. According to accepted business principles, reserve is the portion of profit set aside for meeting known or unknown future contingencies.

In short, the amount which is allocated from the profit for any specific purpose or without any purpose is known as reserve. This reserve is created from the Profit and Loss Appropriation Account, e.g., General reserve, Workers accident compensation fund, Investment fluctuation reserve, Dividend equalization fund, Capital redemption reserve, Debenture redemption fund, etc.

• True and fair profit or loss of the business can be ascertained.
• On the expiry of the useful life of an asset, the managed funds (Provision) can be used to purchase new assets.
• Known liability of future can be spread evenly over certain years by making provisions.
• Assumption of going concern and principle of prudence can be followed by making provision.
• Business capital will be maintained by making provisions.
• To show the assets and liabilities of the business at correct and true value.
• To provide for future losses and expenses if amount of such losses and expenses is not determined in advance.
• Provision is made to prevent impact of transactions made during the year on the financial performance in future.

Considering the future, the amount set apart from the profit is known as a reserve. According to accepted business principles, reserve is the portion of profit set aside for meeting known or unknown future contingencies.

In short, the amount which is allocated from the profit for any specific purpose or without any purpose is known as reserve. This reserve is created from the Profit and Loss Appropriation Account, e.g., General reserve, Workers accident compensation fund, Investment fluctuation reserve, Dividend equalization fund, Capital redemption reserve, Debenture redemption fund, etc.

The importance of creating reserve is as under:

• It strengthens the liquidity position for the solvency of the business.
• In order to meet any loss that may arise in future or to meet the future contingent loss, a reserve is maintained.
• Required necessary funds for expansion of the business is available from the reserve or profit of the business only.
• Reserve can be used to honor long term liabilities.
• Company can maintain dividend equalization by using reserve.
• Cash liquidity is to be maintained in the business by using reserve.
• A reserve is to provide for any known liabilities to be paid easily in future like provident fund, etc.
• Reserves are created to fulfil some of the statutory requirements.

Correct option is (a) Capital reserve

1. Instigator: As an instigator, marketer keenly watches the developments taking place in the market and identifies marketing opportunities emerging in the ever changing market. 

2. Integrator: Marketer plays a role of integrator in the sense that he collects feedback or vital inputs from channel members and consumers. 

3. Implementer: Marketer plays a role of implementer when he/she actually converts marketing opportunities into marketable product.

A commodity market is a place where produced goods or consumption goods are bought and sold.

Correct option is (b) Secret reserve

General reserve is a helping hand for business in contingencies.

Accounting entry: Profit and Loss Appropriation A/c Dr To General reserve A/c

Correct option is (b) Secret reserve

Revenue reserve is very useful to increase financial soundness of business.

1. Gathering and Analysing market information 

2. Market planning 

3. Product Designing and development 

4. Standardisation and Grading 

5. Packaging and Labelling 

6. Branding 

7. Customer Support Services 

8. Pricing of Products 

9. Promotion and Selling 

10. Physical Distribution

11. Transportation 

12. Storage and Warehousing